OraSure Announces 2009 Third Quarter Financial Results
BETHLEHEM, Pa.,
The revenue increase for the third quarter reflects double digit growth in sales of the Company's infectious disease testing, cryosurgical systems and insurance risk assessment testing products, partially offset by lower sales of its substance abuse testing products. A major contributor to the higher quarterly infectious disease testing revenues was the elimination of a
The Company recorded net income 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
"We are pleased with our third quarter results and especially with the strong growth experienced across multiple product lines," said
For the nine months ended
Gross margin in the third quarter of 2009 was 64% compared to 58% in the third quarter of 2008. Gross margin was favorably impacted in the current quarter primarily by increased absorption of the Company's fixed costs as a result of the return to full-scale manufacturing of the OraQuick(R) rapid HIV-1/2 test and replenishment of finished goods inventories for this product. Gross margin also benefited in the quarter by the Company's switch in
Operating expenses for the third quarter of 2009 decreased to
Cash, cash equivalents and short-term investments totaled
Fourth Quarter 2009 Outlook
The Company expects total revenues for the fourth quarter of 2009 to range from approximately
Financial Data
Condensed Financial Data
(In thousands, except per-share
data and percentages)
Unaudited
---------
Three months ended Nine months ended
September 30, September 30,
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2009 2008 2009 2008
-------- -------- -------- --------
Results of Operations
Revenues $ 21,609 $ 16,860 $ 56,139 $ 53,895
Cost of products sold 7,706 7,145 21,384 22,393
-------- -------- -------- --------
Gross profit 13,903 9,715 34,755 31,502
-------- -------- -------- --------
Operating expenses:
Research and development 2,925 4,167 8,710 14,864
Sales and marketing 5,228 5,327 15,540 15,505
General and administrative 3,975 3,562 12,866 11,293
Litigation settlement -- -- -- (4,884)
Impairment of patent and
product rights -- -- 3,028 --
-------- -------- -------- --------
Total operating expenses 12,128 13,056 40,144 36,778
-------- -------- -------- --------
Operating income (loss) 1,775 (3,341) (5,389) (5,276)
Other income, net 24 588 411 2,194
-------- -------- -------- --------
Income (loss) before income
taxes 1,799 (2,753) (4,978) (3,082)
Income tax benefit -- (991) -- (1,079)
-------- -------- -------- --------
Net income (loss) $ 1,799 $ (1,762) $ (4,978) $ (2,003)
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Earnings (loss) per share:
Basic and Diluted $ 0.04 $ (0.04) $ (0.11) $ (0.04)
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Weighted average shares:
Basic 45,880 46,692 45,863 46,774
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Diluted 46,024 46,692 45,863 46,774
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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.
Nine months ended
September 30, Change
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2009 2008
---- ----
Loss before income taxes, as reported
under GAAP $ (4,978) $ (3,082) $ (1,896)
Pre-tax impairment charge adjustment 3,028 -- 3,028
Pre-tax litigation settlement -- (4,884) 4,884
-------- -------- --------
Loss before income taxes, non-GAAP $ (1,950) $ (7,966) $ 6,016
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Three months ended September 30,
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Percentage of
Dollars % Total Revenues
------------------ -------------
Market Revenues 2009 2008 Change 2009 2008
-------- -------- ------ ------ -----
Infectious disease testing $ 13,540 $ 9,743 39% 63% 58%
Substance abuse testing 3,269 3,581 (9) 15 21
Cryosurgical systems 2,682 1,671 61 12 10
Insurance risk assessment 1,416 1,163 22 7 7
-------- -------- ------ -----
Product revenues 20,907 16,158 29 97 96
Licensing and product
development 702 702 -- 3 4
-------- -------- ------ -----
Total revenues $ 21,609 $ 16,860 28% 100% 100%
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Nine months ended September 30,
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Percentage of
Dollars % Total Revenues
------------------ -------------
Market Revenues 2009 2008 Change 2009 2008
-------- -------- ------ ------ -----
Infectious disease testing $ 33,407 $ 29,260 14% 59% 54%
Substance abuse testing 8,890 10,554 (16) 16 20
Cryosurgical systems 7,728 7,726 -- 14 14
Insurance risk assessment 4,552 4,395 4 8 8
-------- -------- ------ -----
Product revenues 54,577 51,935 5 97 96
Licensing and product
development 1,562 1,960 (20) 3 4
-------- -------- ------ -----
Total revenues $ 56,139 $ 53,895 4% 100% 100%
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Three months ended Nine months ended
September 30, % September 30, %
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OraQuick(R)
Revenues 2009 2008 Change 2009 2008 Change
-------- -------- ------ -------- -------- ------
Direct to U.S.
Public Health $ 8,611 $ 6,157 40% $ 20,957 $ 19,273 9%
Hospital Market 3,156 1,799 75 8,401 5,489 53
International 1,415 957 48 2,370 2,303 3
-------- -------- -------- --------
Total OraQuick
(R) revenues $ 13,182 $ 8,913 48% $ 31,728 $ 27,065 17%
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Three months ended Nine months ended
September 30, % September 30, %
------------------ ------------------
Intercept(R)
Revenues 2009 2008 Change 2009 2008 Change
-------- -------- ------ -------- -------- ------
Workplace
testing $ 1,068 $ 1,193 (10)% $ 2,871 $ 3,480 (18)%
Criminal Justice 736 637 16 1,918 1,965 (2)
International 479 481 -- 1,524 1,570 (3)
Direct 282 303 (7) 645 904 (29)
-------- -------- -------- --------
Total Intercept
(R) revenues $ 2,565 $ 2,614 (2)% $ 6,958 $ 7,919 (12)%
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Three months ended Nine months ended
Cryosurgical September 30, % September 30, %
Systems ------------------ ------------------
Revenues 2009 2008 Change 2009 2008 Change
-------- -------- ------ -------- -------- ------
Professional
domestic $ 1,220 $ 903 35% $ 2,969 $ 2,942 1%
Professional
international 337 401 (16) 1,601 1,802 (11)
OTC domestic (122) -- N/A 57 -- N/A
OTC international 1,247 367 240 3,101 2,982 4
-------- -------- -------- --------
Total
cryosurgical
systems
revenues $ 2,682 $ 1,671 61% $ 7,728 $ 7,726 --%
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Balance Sheets September 30, 2009 December 31, 2008
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Assets
------
Cash, cash equivalents and
short-term investments $ 83,027 $ 82,523
Accounts receivable, net 12,329 11,571
Inventories 9,430 10,704
Other current assets 1,233 1,418
Property and equipment, net 20,419 21,235
Other non-current assets 1,236 4,467
------------------ -----------------
Total assets $ 127,674 $ 131,918
================== =================
Liabilities and Stockholders'
Equity
-----------------------------
Current portion of long-term
debt $ 524 $ 558
Accounts payable 2,943 3,926
Accrued expenses 10,481 10,796
Long-term debt 7,917 8,301
Other liabilities 2 12
Stockholders' equity 105,807 108,325
------------------ -----------------
Total liabilities and
stockholders' equity $ 127,674 $ 131,918
================== =================
Nine months ended
September 30,
Additional Financial Data 2009 2008
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Capital expenditures $ 989 $ 1,949
Depreciation and amortization $ 2,360 $ 2,122
Purchase and retirement of
common stock $ 309 $ 2,524
Cash flows provided by
(used in) operating
activities $ 2,688 $ (3,743)
Accounts receivable - days
sales outstanding 60 days 63 days
Conference Call
The Company will host a conference call and audio webcast to discuss the Company's 2009 third quarter financial results, business developments and fourth quarter 2009 financial guidance, beginning today at
In order to listen to the conference call, please either dial 888-797-2983 (Domestic) or 913-981-5550 (International) and reference Conference ID #6762345, 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
