Full Press Release Details
Chief Financial Officer
OraSure Announces 2016 Second Quarter Financial Results
BETHLEHEM, PA August 3, 2016 (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, 2016.
Financial Highlights
We are pleased with the Company s financial performance for the second quarter of 2016, which exceeded expectations on both the top and bottom
lines, said Douglas A. Michels, President and CEO of OraSure Technologies. Continued growth in sales of our infectious disease and molecular collection systems products were the main drivers behind this performance. We expect long-term
growth from both of these businesses and see the international marketplace as an emerging and increasingly important strategic priority for our Company.
Consolidated net product revenues for
both the second quarter and first six months of 2016 increased 5% over the comparable periods of 2015, primarily as a result of higher sales of the Company s OraQuick HCV, OraQuick HIV, and molecular collection systems products. These increases were partially offset by lower sales of the Company s risk assessment products and the absence of sales of the Company s
OraQuick Ebola Rapid Antigen test. The increase for the six month period also included higher sales of the Company s cryosurgical systems products.
Consolidated other revenues for the second quarter and first six months of 2016 were $3.8 million and $7.6 million, respectively. This compares to
consolidated other revenues for the second quarter and first six months of 2015 of $4.1 million and $7.4 million, respectively. Exclusivity revenue recognized under the Company s HCV co-promotion agreement with AbbVie for the second quarter and
first six months of 2016 and 2015 was $3.4 million and $6.7 million, respectively. Other revenue in the second quarter of 2016 and 2015 included $417,000 and $714,000, respectively, 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 for the first six months of 2016 and 2015 included $899,000
and $714,000, respectively, in BARDA funding.
Consolidated gross margin for the three and six months ended June 30, 2016 was 67% and 68%,
respectively. Consolidated gross margin for the three and six months ended June 30, 2015 was 68% and 66%, respectively. Gross margin for
the current quarter decreased primarily due to an unfavorable product mix partially offset by lower scrap and spoilage costs. Gross margin for the six-month period increased largely due to lower
scrap and spoilage costs, a more favorable product mix, decreased royalty expense, and an increase in Ebola-related funding from BARDA.
operating expenses decreased to $16.7 million during the second quarter of 2016 compared to $17.9 million in the second quarter of 2015. For the six months ended June 30, 2016, consolidated operating expenses were $34.4 million, a decrease from
the $35.3 million reported for the six months ended June 30, 2015. The quarterly decrease was largely due to lower costs associated with the AbbVie HCV co-promotion agreement partially offset by higher legal costs. The decrease in the six-month
period was largely due to lower research and development expenses and lower costs associated with the AbbVie co-promotion agreement, partially offset by increased legal and consulting costs.
The Company s cash and short-term investment balance totaled $113.4 million at June 30, 2016 compared to $101.3 million at December 31, 2015.
Working capital was $120.3 million at June 30, 2016 compared to $111.5 million at December 31, 2015. For the six months ended June 31, 2016, the Company generated $16.7 million in cash from operations.
Third Quarter 2016 Outlook
consolidated net revenues to range from $31.25 to $31.75 million and is projecting consolidated net income of between $0.07 and $0.08 per share for the third quarter of 2016.
Condensed Consolidated Financial Data
(In thousands, except per-share data)
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Results of Operations | ||||||||||||||||
| Net revenues | $ | 31,359 | $ | 30,388 | $ | 60,448 | $ | 57,476 | ||||||||
| Cost of products sold | 10,274 | 9,692 | 19,050 | 19,782 | ||||||||||||
| Gross profit | 21,085 | 20,696 | 41,398 | 37,694 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 2,985 | 2,996 | 5,351 | 6,436 | ||||||||||||
| Sales and marketing | 7,397 | 8,904 | 16,103 | 16,788 | ||||||||||||
| General and administrative | 6,354 | 6,075 | 12,896 | 12,040 | ||||||||||||
| Total operating expenses | 16,736 | 17,975 | 34,350 | 35,264 | ||||||||||||
| Operating income | 4,349 | 2,721 | 7,048 | 2,430 | ||||||||||||
| Other income (expense) | (340 | ) | (95 | ) | (532 | ) | 314 | |||||||||
| Income before income taxes | 4,009 | 2,626 | 6,516 | 2,744 | ||||||||||||
| Income tax expense | 173 | 658 | 234 | 663 | ||||||||||||
| Net income | $ | 3,836 | $ | 1,968 | $ | 6,282 | $ | 2,081 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.07 | $ | 0.03 | $ | 0.11 | $ | 0.04 | ||||||||
| Diluted | $ | 0.07 | $ | 0.03 | $ | 0.11 | $ | 0.04 | ||||||||
| Weighted average shares: | ||||||||||||||||
| Basic | 55,543 | 56,453 | 55,497 | 56,398 | ||||||||||||
| Diluted | 56,208 | 56,687 | 56,144 | 56,678 |
Summary of Net Revenues by Market and Product (Unaudited)
| Three Months Ended June 30, | ||||||||||||||||||||
| Dollars | Percentage of Total Net Revenues | |||||||||||||||||||
| Market | 2016 | 2015 | % Change | 2016 | 2015 | |||||||||||||||
| Infectious disease testing | $ | 12,949 | $ | 11,792 | 10 | % | 41 | % | 39 | % | ||||||||||
| Risk assessment testing | 3,159 | 3,466 | (9 | ) | 10 | 11 | ||||||||||||||
| Cryosurgical systems | 3,041 | 2,953 | 3 | 10 | 10 | |||||||||||||||
| Molecular collection systems | 8,433 | 8,102 | 4 | 27 | 27 | |||||||||||||||
| Net product revenues | 27,582 | 26,313 | 5 | 88 | 87 | |||||||||||||||
| Other | 3,777 | 4,075 | (7 | ) | 12 | 13 | ||||||||||||||
| Net revenues | $ | 31,359 | $ | 30,388 | 3 | % | 100 | % | 100 | % | ||||||||||
| Six Months Ended June 30, | ||||||||||||||||||||
| Dollars | Percentage of Total Net Revenues | |||||||||||||||||||
| Market | 2016 | 2015 | % Change | 2016 | 2015 | |||||||||||||||
| Infectious disease testing | $ | 24,317 | $ | 23,288 | 4 | % | 40 | % | 40 | % | ||||||||||
| Risk assessment testing | 6,265 | 6,473 | (3 | ) | 10 | 11 | ||||||||||||||
| Cryosurgical systems | 6,922 | 5,498 | 26 | 12 | 10 | |||||||||||||||
| Molecular collection systems | 15,323 | 14,819 | 3 | 25 | 26 | |||||||||||||||
| Net product revenues | 52,827 | 50,078 | 5 | 87 | 87 | |||||||||||||||
| Other | 7,621 | 7,398 | 3 | 13 | 13 | |||||||||||||||
| Net revenues | $ | 60,448 | $ | 57,476 | 5 | % | 100 | % | 100 | % |
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| HIV Revenues | 2016 | 2015 | % Change | 2016 | 2015 | % Change | ||||||||||||||||||
| Domestic | $ | 5,886 | $ | 6,593 | (11 | )% | $ | 11,588 | $ | 12,601 | (8 | )% | ||||||||||||
| International | 1,969 | 596 | 230 | 2,824 | 1,544 | 83 | ||||||||||||||||||
| Domestic OTC | 1,739 | 1,719 | 1 | 3,262 | 3,280 | (1 | ) | |||||||||||||||||
| Net product revenues | $ | 9,594 | $ | 8,908 | 8 | % | $ | 17,674 | $ | 17,425 | 1 | % | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| HCV Revenues | 2016 | 2015 | % Change | 2016 | 2015 | % Change | ||||||||||||||||||
| Domestic | $ | 1,788 | $ | 1,693 | 6 | % | $ | 3,689 | $ | 2,889 | 28 | % | ||||||||||||
| International | 1,428 | 646 | 121 | 2,430 | 1,619 | 50 | ||||||||||||||||||
| Net product revenues | 3,216 | 2,339 | 37 | 6,119 | 4,508 | 36 | ||||||||||||||||||
| Amortization of exclusivity payments | 3,360 | 3,361 | 0 | 6,722 | 6,684 | 1 | ||||||||||||||||||
| Net HCV-related revenues | $ | 6,576 | $ | 5,700 | 15 | % | $ | 12,841 | $ | 11,192 | 15 | % | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| Cryosurgical Systems Revenues | 2016 | 2015 | % Change | 2016 | 2015 | % Change | ||||||||||||||||||
| Domestic professional | $ | 1,145 | $ | 1,008 | 14 | % | $ | 2,699 | $ | 1,668 | 62 | % | ||||||||||||
| International professional | 211 | 142 | 49 | 446 | 498 | (10 | ) | |||||||||||||||||
| Domestic OTC | 345 | 108 | 219 | 723 | 163 | 344 | ||||||||||||||||||
| International OTC | 1,340 | 1,695 | (21 | ) | 3,054 | 3,169 | (4 | ) | ||||||||||||||||
| Net cryosurgical systems revenues | $ | 3,041 | $ | 2,953 | 3 | % | $ | 6,922 | $ | 5,498 | 26 | % |
Condensed Consolidated Balance Sheets (Unaudited)
| June 30, 2016 | December 31, 2015 | |||||||
| Assets | ||||||||
| Cash | $ | 105,701 | $ | 94,094 | ||||
| Short-term investments | 7,736 | 7,225 | ||||||
| Accounts receivable, net | 18,436 | 19,265 | ||||||
| Inventories | 11,366 | 13,242 | ||||||
| Other current assets | 3,136 | 2,888 | ||||||
| Property and equipment, net | 20,200 | 20,083 | ||||||
| Intangible assets, net | 12,020 | 12,591 | ||||||
| Goodwill | 19,541 | 18,250 | ||||||
| Other non-current assets | 1,784 | 1,683 | ||||||
| Total assets | $ | 199,920 | $ | 189,321 | ||||
| Liabilities and Stockholders Equity | ||||||||
| Accounts payable | $ | 3,956 | $ | 5,087 | ||||
| Deferred revenue | 13,822 | 9,735 | ||||||
| Other current liabilities | 8,293 | 10,412 | ||||||
| Other non-current liabilities | 2,018 | 1,768 | ||||||
| Deferred income taxes | 3,043 | 2,883 | ||||||
| Stockholders equity | 168,788 | 159,436 | ||||||
| Total liabilities and stockholders equity | $ | 199,920 | $ | 189,321 | ||||
| Six months ended | ||||||||
| June 30, | ||||||||
| Additional Financial Data (Unaudited) | 2016 | 2015 | ||||||
| Capital expenditures | $ | 2,729 | $ | 1,145 | ||||
| Depreciation and amortization | $ | 2,778 | $ | 2,849 | ||||
| Stock-based compensation | $ | 2,942 | $ | 3,008 | ||||
| Cash provided by (used in) operating activities | $ | 16,741 | $ | (3,421 | ) |
Company will host a conference call and audio webcast to discuss the Company s 2016 second quarter financial results, certain business developments and financial guidance for the third quarter of 2016, 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 #46406766 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 10, 2016,
by dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and entering the Conference ID #46406766.
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; 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 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, 2015, 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.