OraSure Announces 2009 Second Quarter Financial Results and Resumption of Full-Scale OraQuick(r) Production
BETHLEHEM, Pa.,
The decrease in revenue for the second quarter was primarily caused by lower sales of infectious disease products as a direct result of a manufacturing issue related to the Company's OraQuick(r) test. Due to difficulty experienced in manufacturing a component of the Company's OraQuick(r) test during the second quarter of 2009, the Company was unable to manufacture sufficient quantities of the test needed to meet full customer demand. As a result, inventory levels were reduced and the Company had a
"Our infectious disease business performed well during the second quarter, and we expect that to continue now that we have resolved the recent manufacturing issue experienced with our OraQuick(r) test," said
The Company recorded a net loss of
During the fourth quarter of 2008, the Company established a full valuation allowance against its net deferred tax asset. As a result, the Company will not record Federal income tax expense or benefit in 2009. The Company recorded an income tax benefit of
For the six months ended
Gross margin in the second quarter of 2009 was 57% compared to 59% in the second quarter of 2008. Gross margin was favorably impacted in the current quarter by the Company's switch in
Operating expenses for the second quarter of 2009 increased to
Cash, cash equivalents and short-term investments totaled
Third Quarter 2009 Outlook
The Company expects total revenues for the third quarter of 2009 to range from approximately
Financial Data
Condensed Financial Data
(In thousands, except per-share
data and percentages)
Unaudited
Three months Six months
ended ended
June 30, June 30,
---------------- ----------------
2009 2008 2009 2008
------- ------- ------- -------
Results of Operations
Revenues $17,274 $18,946 $34,530 $37,035
Cost of products sold 7,394 7,803 13,678 15,249
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Gross profit 9,880 11,143 20,852 21,786
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Operating expenses:
Research and development 2,433 6,099 5,785 10,697
Sales and marketing 5,289 4,962 10,312 10,178
General and administrative 4,435 3,890 8,892 7,731
Impairment of patent
and product rights 3,028 -- 3,028 --
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Total operating expenses 15,185 14,951 28,017 28,606
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Operating loss (5,305) (3,808) (7,165) (6,820)
Other income, net 145 744 387 6,490
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Loss before income taxes (5,160) (3,064) (6,778) (330)
Income tax benefit -- (821) -- (88)
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Net loss $(5,160) $(2,243) $(6,778) $ (242)
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Loss per share:
Basic and Diluted $ (0.11) $ (0.05) $ (0.15) $ (0.01)
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Weighted average shares:
Basic and Diluted 45,871 46,847 45,854 46,815
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Non-GAAP Financial Measures
The Company's management considers the use of non-GAAP financial measures helpful in assessing the Company's current period's financial performance, especially in comparison to the same period of the prior year. As such, the Company has presented non-GAAP loss before income taxes in the table below.
While the Company believes that disclosing the following non-GAAP financial measure allows for greater transparency in the review of its underlying financial performance, it does not consider such measures to be substitutes for, or superior to, loss before income taxes as determined in accordance with GAAP. For purposes of calculating the non-GAAP loss before income taxes, the Company excluded the
The following table reconciles the GAAP loss before income taxes to the non-GAAP loss before income taxes for the periods indicated, as well as the period-to-period change.
Three months ended
June 30, Change
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2009 2008
------- -------
Loss before income taxes, as
reported under GAAP $(5,160) $(3,064) $(2,096)
Pre-tax impairment charge adjustment 3,028 -- 3,028
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Loss before income taxes, non-GAAP $(2,132) $(3,064) $ 932
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Six months ended
June 30, Change
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2009 2008
------- -------
Loss before income taxes, as
reported under GAAP $(6,778) $ (330) $(6,448)
Pre-tax impairment charge adjustment 3,028 -- 3,028
Pre-tax gain adjustment -- (4,884) 4,884
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Loss before income taxes, non-GAAP $(3,750) $(5,214) $ 1,464
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Three months ended June 30,
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Percentage of
Dollars Total Revenues
---------------- % ----------------
Market Revenues 2009 2008 Change 2009 2008
------- ------- ------ ------- -------
Infectious disease
testing $ 9,417 $10,033 (6)% 54% 53%
Substance abuse testing 2,932 3,697 (21) 17 20
Cryosurgical systems 2,901 2,719 7 17 14
Insurance risk
assessment 1,499 1,693 (11) 9 9
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Product revenues 16,749 18,142 (8) 97 96
Licensing and
product development 525 804 (35) 3 4
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Total revenues $17,274 $18,946 (9)% 100% 100%
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Six months ended June 30,
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Percentage of
Dollars Total Revenues
---------------- % ----------------
Market Revenues 2009 2008 Change 2009 2008
------- ------- ------ ------- -------
Infectious disease
testing $19,867 $19,512 2% 58% 53%
Substance abuse
testing 5,622 6,974 (19) 16 19
Cryosurgical systems 5,046 6,055 (17) 15 16
Insurance risk
assessment 3,134 3,236 (3) 9 9
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Product revenues 33,669 35,777 (6) 98 97
Licensing and
product development 861 1,258 (32) 2 3
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Total revenues $34,530 $37,035 (7)% 100% 100%
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Three months ended Six months ended
June 30, June 30,
---------------- % ---------------- %
OraQuick(R) Revenues 2009 2008 Change 2009 2008 Change
------- ------- ------ ------- ------- ------
Direct to U.S.
Public Health $ 5,790 $ 6,899 (16)% $12,346 $13,183 (6)%
Hospital Market 2,501 1,698 47 5,245 3,622 45
International 496 701 (29) 953 1,347 (29)
------- ------- ------- --------
Total OraQuick
(R) revenues $ 8,787 $ 9,298 (5)% $18,544 $18,152 2%
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Three months ended Six months ended
June 30, June 30,
Intercept(R) ---------------- % ---------------- %
Revenues 2009 2008 Change 2009 2008 Change
------- ------- ------ ------- ------- ------
Workplace testing $ 946 $ 1,272 (26)% $ 1,803 $ 2,287 (21)%
Criminal Justice 630 708 (11) 1,182 1,327 (11)
International 523 564 (7) 1,045 1,089 (4)
Direct 195 330 (41) 363 601 (40)
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Total
Intercept(R)
revenues $ 2,294 $ 2,874 (20)% $ 4,393 $ 5,304 (17)%
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Cryosurgical Three months ended Six months ended
Systems June 30, June 30,
---------------- % ---------------- %
Revenues 2009 2008 Change 2009 2008 Change
------- ------- ------ ------- ------- ------
Professional
domestic $ 807 $ 1,004 (20)% $ 1,749 $ 2,037 (14)%
Professional
international 636 665 (4) 1,265 1,404 (10)
OTC domestic 122 -- 100 179 -- 100
OTC international 1,336 1,050 27 1,853 2,614 (29)
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Total
cryosurgical
systems
revenues $ 2,901 $ 2,719 7% $ 5,046 $ 6,055 (17)%
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Balance Sheets June 30, Dec. 31,
Assets 2009 2008
Cash, cash equivalents and -------- --------
short-term investments $ 79,162 $ 82,523
Accounts receivable, net 11,071 11,571
Inventories 8,663 10,704
Other current assets 1,273 1,418
Property and equipment, net 20,775 21,235
Other non-current assets 1,036 4,467
-------- --------
Total assets $121,980 $131,918
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Liabilities and Stockholders' Equity
Current portion of long-term debt $ 539 $ 558
Accounts payable 2,086 3,926
Accrued expenses 8,223 10,796
Long-term debt 8,042 8,301
Other liabilities 5 12
Stockholders' equity 103,085 108,325
-------- --------
Total liabilities and
stockholders' equity $121,980 $131,918
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Six months ended
June 30,
Additional Financial Data 2009 2008
-------- --------
Capital expenditures $ 741 $ 1,314
Depreciation and amortization $ 1,673 $ 1,387
Purchase and retirement of common stock $ 309 --
Cash flows used in operating activities $ 1,641 $ 1,915
Accounts receivable - days sales outstanding 58 days 62 days
Conference Call
The Company will host a conference call and audio webcast to discuss the Company's 2009 second quarter financial results, business developments and third quarter 2009 financial guidance, beginning today at
In order to listen to the conference call, please either dial 877-419-6597 (Domestic) or 719-325-4848 (International) and reference Conference ID #4031205, or go to
About
The
Important Information
This press release contains certain forward-looking statements, including with respect to revenues, expenses, net income, earnings/loss per share and products. Actual results could be significantly different. Factors that could affect results include the 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; changes in relationships, including disputes or disagreements, with strategic partners 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; impact of competitors, competing products and technology changes; impact of the economic downturn, high unemployment and credit crisis; 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 and extended shelf life; continued bulk purchases by customers, including governmental agencies, and the ability to fully deploy those purchases in a timely manner; 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; 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; history of losses and ability to achieve sustained profitability and ability to utilize net operating loss carryforwards 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 changes in international funding sources; loss or impairment of sources of capital; ability to meet financial covenants in agreements with financial institutions; ability to retain qualified personnel; exposure to patent infringement, 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; ability to identify, complete and realize the full benefits of potential acquisitions; and general political, business and economic conditions. These and other factors are discussed more fully in the
(1) GAAP is defined as U.S. Generally Accepted Accounting Principles.
CONTACT:
Ronald H. Spair, Chief Financial Officer
610-882-1820
Investorinfo@orasure.com
www.orasure.com
