Full Press Release Details
Chief Financial Officer
OraSure Announces 2015 Second Quarter Financial Results
BETHLEHEM, PA August 5, 2015 (Globe Newswire) OraSure Technologies, Inc. (NASDAQ: OSUR), a leader in point-of-care diagnostic tests and specimen collection devices, today announced its consolidated financial results for the three and six months ended June 30, 2015.
Financial Highlights
We are pleased with the record level of revenues reported for the second quarter of 2015 as well as our bottom line results, said Douglas A.
Michels, President and CEO of OraSure Technologies. Our molecular collection systems business continues the high performance level we have seen in recent quarters and our HCV business continues to grow nicely. We are also making good progress
in our efforts to fund and commercialize a rapid Ebola test on our OraQuick platform. With the first half of the year now complete, I believe we are well positioned to deliver solid growth
and full year profitability for 2015.
Consolidated net product revenues for the second quarter and first six months of 2015 increased 3% and 2% over the comparable periods of 2014, respectively,
primarily as a result of higher sales of the Company s molecular collection systems, OraQuick HCV and Intercept products. These
increases were partially offset by lower cryosurgical systems and OraQuick professional HIV product sales.
Consolidated other revenues for the second quarter and first six months of 2015 were $4.1 million and $7.4 million, respectively. Other revenues in the
current quarter included $3.4 million of exclusivity payments recognized under the Company s HCV co-promotion agreement with AbbVie and $714,000 of Ebola-related funding received from the U.S. Department
of Health and Human Services Office of the Assistant Secretary for Preparedness and Response s Biomedical
Advanced Research and Development Authority ( BARDA ). Other revenue in the first six months of 2015 included $6.7 million of exclusivity payments and the $714,000 in BARDA funding.
Other revenues in the second quarter and first six months of 2014 included $775,000 of AbbVie exclusivity payments.
Consolidated gross margin for the
three and six months ended June 30, 2015 was 68% and 66%, respectively. Consolidated gross margin for the three and six months ended June 30, 2014 was 61% and 60%, respectively. Gross margin for the current quarter and six-month period
improved largely as a result of the $4.1 million and $7.4 million in other non-product revenues, respectively. Other revenues contributed approximately 500 basis points to gross margin for both the three and six months ended June 30, 2015 and
approximately 100 basis points to gross margin for both the three and six months ended June 30, 2014. Gross margins in 2015 also benefited from a reduction in royalty expense partially offset by an increase in scrap and spoilage costs.
Consolidated operating expenses increased to $17.9 million during the second quarter of 2015 compared to $13.5 million in the comparable period of 2014. For
the six months ended June 30, 2015, consolidated operating expenses were $35.3 million, an increase from the $33.1 million reported for the six months ended June 30, 2104. The increases for both the quarter and six-month period were
largely due to the absence of the $5.5 million Roche termination payment received in 2014, increased research and development costs and higher costs associated with the AbbVie co-promotion agreement, partially offset by lower promotional expenses
for the Company s OraQuick In-Home HIV test. Promotional expenses for the OraQuick In-Home HIV test were $484,000 and
$3.0 million for the second quarters of 2015 and 2014, respectively, and $917,000 and $7.6 million for the first six months of 2015 and 2014, respectively.
The Company s cash and short-term investment balance totaled $91.4 million at June 30, 2015 compared to $97.9 million at December 31, 2014.
Working capital was $109.7 million at June 30, 2015 compared to $104.8 million at December 31, 2014. For the six months ended June 30, 2015, the Company used $3.4 million to fund operations.
Third Quarter 2015 Outlook
consolidated net revenues to range from $29.5 to $30.0 million and is projecting a consolidated bottom line performance of breakeven to a consolidated net loss of ($0.01) per share.
Condensed Consolidated Financial Data
(In thousands, except per-share data)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Results of Operations | ||||||||||||||||
| Net revenues | $ | 30,388 | $ | 26,401 | $ | 57,476 | $ | 49,938 | ||||||||
| Cost of products sold | 9,692 | 10,385 | 19,782 | 19,995 | ||||||||||||
| Gross profit | 20,696 | 16,016 | 37,694 | 29,943 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 2,996 | 2,771 | 6,436 | 5,252 | ||||||||||||
| Sales and marketing | 8,904 | 10,272 | 16,788 | 21,612 | ||||||||||||
| General and administrative | 6,075 | 5,976 | 12,040 | 11,700 | ||||||||||||
| Gain on contract termination | (5,500 | ) | (5,500 | ) | ||||||||||||
| Total operating expenses | 17,975 | 13,519 | 35,264 | 33,064 | ||||||||||||
| Operating income (loss) | 2,721 | 2,497 | 2,430 | (3,121 | ) | |||||||||||
| Other income (expense) | (95 | ) | (142 | ) | 314 | (24 | ) | |||||||||
| Income (loss) before income taxes | 2,626 | 2,355 | 2,744 | (3,145 | ) | |||||||||||
| Income tax expense (benefit) | 658 | (174 | ) | 663 | (43 | ) | ||||||||||
| Net income (loss) | $ | 1,968 | $ | 2,529 | $ | 2,081 | $ | (3,102 | ) | |||||||
| Earnings (loss) per share: | ||||||||||||||||
| Basic | $ | 0.03 | $ | 0.05 | $ | 0.04 | $ | (0.06 | ) | |||||||
| Diluted | $ | 0.03 | $ | 0.04 | $ | 0.04 | $ | (0.06 | ) | |||||||
| Weighted average shares: | ||||||||||||||||
| Basic | 56,453 | 55,907 | 56,398 | 55,846 | ||||||||||||
| Diluted | 56,687 | 57,243 | 56,678 | 55,846 |
Summary of Net Revenues by Market and Product (Unaudited)
| Three Months Ended June 30, | ||||||||||||||||||||
| Dollars | Percentage of Total Net Revenues | |||||||||||||||||||
| Market | 2015 | 2014 | % Change | 2015 | 2014 | |||||||||||||||
| Infectious disease testing | $ | 11,792 | $ | 12,668 | (7 | )% | 39 | % | 47 | % | ||||||||||
| Substance abuse testing | 2,527 | 2,208 | 14 | 8 | 8 | |||||||||||||||
| Cryosurgical systems | 2,953 | 4,920 | (40 | ) | 10 | 19 | ||||||||||||||
| Molecular collection systems | 8,102 | 4,896 | 65 | 27 | 19 | |||||||||||||||
| Insurance risk assessment | 939 | 934 | 1 | 3 | 4 | |||||||||||||||
| Net product revenues | 26,313 | 25,626 | 3 | 87 | 97 | |||||||||||||||
| Other | 4,075 | 775 | NM | * | 13 | 3 | ||||||||||||||
| Net revenues | $ | 30,388 | $ | 26,401 | 15 | % | 100 | % | 100 | % |
| Six Months Ended June 30, | ||||||||||||||||||||
| Dollars | Percentage of Total Net Revenues | |||||||||||||||||||
| Market | 2015 | 2014 | % Change | 2015 | 2014 | |||||||||||||||
| Infectious disease testing | $ | 23,288 | $ | 23,732 | (2 | )% | 40 | % | 47 | % | ||||||||||
| Substance abuse testing | 4,629 | 4,038 | 15 | 8 | 8 | |||||||||||||||
| Cryosurgical systems | 5,498 | 8,887 | (38 | ) | 10 | 18 | ||||||||||||||
| Molecular collection systems | 14,819 | 10,655 | 39 | 26 | 21 | |||||||||||||||
| Insurance risk assessment | 1,844 | 1,851 | (0 | ) | 3 | 4 | ||||||||||||||
| Net product revenues | 50,078 | 49,163 | 2 | 87 | 98 | |||||||||||||||
| Licensing and product development | 7,398 | 775 | NM | * | 13 | 2 | ||||||||||||||
| Net revenues | $ | 57,476 | $ | 49,938 | 15 | % | 100 | % | 100 | % |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| HIV Revenues | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||||||||
| Domestic | $ | 6,593 | $ | 7,720 | (15 | )% | $ | 12,601 | $ | 14,339 | (12 | )% | ||||||||||||
| International | 596 | 848 | (30 | ) | 1,544 | 1,405 | 10 | |||||||||||||||||
| Domestic OTC | 1,719 | 1,669 | 3 | 3,280 | 3,622 | (9 | ) | |||||||||||||||||
| Net product revenues | $ | 8,908 | $ | 10,237 | (13 | )% | $ | 17,425 | $ | 19,366 | (10 | )% |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| HCV Revenues | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||||||||
| Domestic | $ | 1,693 | $ | 1,221 | 39 | % | $ | 2,889 | $ | 1,884 | 53 | % | ||||||||||||
| International | 646 | 974 | (34 | ) | 1,619 | 1,870 | (13 | ) | ||||||||||||||||
| Net product revenues | 2,339 | 2,195 | 7 | 4,508 | 3,754 | 20 | ||||||||||||||||||
| Amortization of exclusivity payments | 3,361 | 775 | NM | * | 6,684 | 775 | NM | * | ||||||||||||||||
| Net HCV-related revenues | $ | 5,700 | $ | 2,970 | 92 | % | $ | 11,192 | $ | 4,529 | NM | *% |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| Intercept Revenues | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||||||||
| Net Intercept revenues | $ | 1,989 | $ | 1,616 | 23 | % | $ | 3,513 | $ | 2,866 | 23 | % |
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| Cryosurgical Systems Revenues | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||||||||
| Domestic professional | $ | 1,008 | $ | 1,469 | (31 | )% | $ | 1,668 | $ | 3,011 | (45 | )% | ||||||||||||
| International professional | 142 | 229 | (38 | ) | 498 | 538 | (7 | ) | ||||||||||||||||
| Domestic over-the-counter | 108 | 100 | 163 | 100 | ||||||||||||||||||||
| International over-the-counter | 1,695 | 3,222 | (47 | ) | 3,169 | 5,338 | (41 | ) | ||||||||||||||||
| Net cryosurgical systems revenues | $ | 2,953 | $ | 4,920 | (40 | )% | $ | 5,498 | $ | 8,887 | (38 | )% |
Condensed Consolidated Balance Sheets (Unaudited)
| June 30, 2015 | December 31, 2014 | |||||||
| Assets | ||||||||
| Cash | $ | 83,403 | $ | 92,867 | ||||
| Short-term investments | 8,005 | 5,000 | ||||||
| Accounts receivable, net | 16,364 | 16,138 | ||||||
| Inventories | 15,654 | 15,763 | ||||||
| Other current assets | 1,837 | 1,446 | ||||||
| Property and equipment, net | 17,888 | 17,934 | ||||||
| Intangible assets, net | 15,105 | 17,505 | ||||||
| Goodwill | 20,222 | 21,734 | ||||||
| Other non-current assets | 1,599 | 1,246 | ||||||
| Total assets | $ | 180,077 | $ | 189,633 | ||||
| Liabilities and Stockholders Equity | ||||||||
| Accounts payable | $ | 4,729 | $ | 7,148 | ||||
| Deferred revenue | 1,780 | 8,043 | ||||||
| Other current liabilities | 9,094 | 11,271 | ||||||
| Other non-current liabilities | 1,258 | 1,234 | ||||||
| Deferred income taxes | 3,364 | 3,236 | ||||||
| Stockholders equity | 159,852 | 158,701 | ||||||
| Total liabilities and stockholders equity | $ | 180,077 | $ | 189,633 |
| Six months ended June 30, | ||||||||
| Additional Financial Data (Unaudited) | 2015 | 2014 | ||||||
| Capital expenditures | $ | 1,145 | $ | 1,988 | ||||
| Depreciation and amortization | $ | 2,849 | $ | 3,108 | ||||
| Stock-based compensation | $ | 3,008 | $ | 2,869 | ||||
| Cash used in operating activities | $ | 3,421 | $ | 10,397 |
Company will host a conference call and audio webcast to discuss the Company s 2015 second quarter financial results, certain business developments and financial guidance for the third quarter of 2015, 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
In order to listen to the conference call, please either dial 844-831-3030 (Domestic) or 315-625-6887
(International) and reference Conference ID #78882836 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 August 12, 2015,
by dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and entering the Conference ID #78882836.
About OraSure Technologies
OraSure Technologies is a leader in the development, manufacture and distribution of point-of-care diagnostic and collection devices and other technologies
designed to detect or diagnose critical medical conditions. Its first-to-market, innovative products include rapid tests for the detection of antibodies to HIV and HCV on the OraQuick
platform, oral fluid sample collection, stabilization and preparation products for molecular diagnostic applications, and oral fluid laboratory tests for detecting various drugs of abuse. 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, commercial and industrial
entities and consumers. The Company s products enable healthcare providers to deliver critical information to patients, empowering them to make decisions to improve and protect their health.
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 warning letters, audit observations 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; our ability to achieve financial and
performance objectives under the HCV co-promotion agreement with AbbVie; failure of distributors or other customers to meet purchase
forecasts, historic purchase levels or minimum purchase requirements for our 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; market acceptance of oral fluid testing or other products; changes in market acceptance of products based on product performance or other factors, including changes in CDC or other testing guidelines,
algorithms or other recommendations; 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 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 OraSure 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 attract and 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, 2014, 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.