BETHLEHEM, Penn.--(BW HealthWire)--April 30, 2001--
Loss Narrows to $547,000 Excluding Non-Recurring Charges;
Manufacturing Realignment Substantially Complete
OraSure Technologies, Inc. (Nasdaq:OSUR), the market leader for
oral fluid diagnostics of infectious disease and drugs-of-abuse, today
announced its financial results for the quarter ended March 31, 2001.
Total revenue for the quarter ended March 31, 2001, rose
approximately 12% to $7.4 million compared to $6.6 million for the
same period a year ago. Revenue from the OraSure(R) oral fluid
collection device and OraQuick(R) rapid HIV 1-2 test increased
approximately 38% as a result of continued penetration in the public
health market and the market introduction of OraQuick in sub-Saharan
Africa. License and product development revenue increased 286% as the
Company achieved certain milestone payments from its Uplink
development partners. These increases were offset by revenue lost as a
result of the discontinuance of the Serum Western Blot product in
January 2001 and lower Histofreezer sales. Excluding revenue from the
prior period for the discontinued Serum Western Blot product, total
revenue would have increased approximately 18%.
"The first quarter was primarily one of integration and execution
for the Company. Successful implementation of our manufacturing
reorganization, continued marketing progress, and hitting our
development milestones have set the stage for an excellent year. Solid
execution allowed us to beat our profit expectations for the quarter,
and we expect to attain our financial goals for the year," said Robert
D. Thompson, Chief Executive Officer of OraSure Technologies.
The net loss was $997,000 or $(0.03) per share for the quarter
ended March 31, 2001, including non-recurring manufacturing
restructuring charges of $450,000 as described below. Excluding the
effect of non-recurring manufacturing restructuring charges, the
Company would have had a net loss of $547,000 or $(0.02) per share.
These results compare to a net loss of $834,000 or $(0.03) per
share in the comparable quarter last year.
In February 2001, the Company announced plans to realign its
manufacturing operations. The Company has since eliminated OraQuick
manufacturing in Beaverton, Oregon and has commenced OraQuick assembly
in Thailand. As a result, the Company incurred $450,000 of
non-recurring restructuring costs in the first quarter, but does not
anticipate any additional costs from the realignment of manufacturing
operations. The restructuring provides greatly expanded capacity for
OraQuick production and is expected to have no financial impact in
2001 and to result in approximately $1.5 million in annual cost
savings to the Company beginning in 2002.
As of March 31, 2001, the Company had a backlog of orders for
approximately 225,000 OraQuick units. New capacity from the Thailand
facility, currently estimated at 2.5 million units annually, should
allow the Company to work off this backlog during the second quarter.
Manufacturing capacity is expected to reach up to 5 million units
annually by May 2001. In addition to the economic benefits of the
Thailand facility, the Company believes that capacity can be quickly
increased to meet higher demand levels.
The gross margin improved to 64% for the quarter ended March 31,
2001 compared to 62% last year, as a result of improved product mix,
negotiated contract savings, and higher license and product
development revenues, partially offset by the incremental costs
associated with the ramp-up of OraQuick manufacturing. The Company's
gross margin is anticipated to continue to improve in the second
quarter, primarily as a result of the Company's manufacturing
reorganization.
Operating expenses, including non-recurring items, increased 15%
for the quarter ended March 31, 2001. Research and development
expenses increased approximately 26% to $2.2 million as a result of
continued development of the OraQuick and Uplink products. Sales and
marketing expenses increased approximately 33% to $1.9 million as a
result of increased staffing levels to create market awareness for the
Company's new products. General and administrative expenses declined
approximately 23% to $1.5 million as a result of cost savings
associated with the merger. Excluding cost of goods sold and
non-recurring items, operating expenses increased 10% for the quarter.
Total annual savings from the integration of the overhead
structure as a result of the merger and the restructuring of
manufacturing operations are expected to be approximately $2.5 million
in 2001, and approximately $4.0 million in 2002.
The Company is targeting revenue growth of 50% for 2001 to
approximately $43 million as OraQuick, Intercept, and UPlink revenues
ramp up throughout the year, and expects to achieve profitability in
the second half of 2001 and for the year as a whole.
Internet Audio Broadcast
OraSure will host a conference call with analysts to discuss these
results beginning at 11:00 a.m. Eastern Time (1:00 p.m. Pacific Time)
today. In order to listen to the conference call, please go to
OraSure's web site, www.orasure.com, at least ten minutes prior to the
start of the call to register, download and install any necessary
audio software. In addition, a replay will be archived on OraSure's
web site shortly after the call has ended and will be available for 30
days.
A replay of the call can also be accessed until May 2, 2001 by
dialing 888/203-1112 (Domestic) or 719/457-0820 (International)
and entering the confirmation number 634697.
Condensed Financial Data
(In thousands, Except Per-Share Data)
(Unaudited)
Quarter ended
March 31,
2001 2000
---- ----
Results of Operations
Revenues $ 7,404 $ 6,619
Operating costs and expenses 8,183 7,512
Manufacturing restructuring costs 450 -
Other income (expense), net 232 59
Net loss (997) (834)
Basic and diluted net loss per share (0.03) (0.03)
Shares used in computing basic
and diluted net loss per share 36,457 33,442
Product Revenue Summary
Three Months Ended March 31,
Percentage of
Dollars Total Revenues
------- % --------------
2001 2000 Change 2001 2000
Product Sales ---- ---- ------ ---- ----
Oral Specimen
collection devices $ 3,253 $ 2,528 29% 44% 38%
OraQuick 234 -- N/A 3% 0%
Histofreezer
cryosurgical systems 1,220 1,364 -11% 16% 21%
Immunoassay Tests 1,670 1,762 -5% 23% 27%
Western Blot HIV
Confirmatory Tests 224 416 -46% 3% 6%
Other product sales 290 416 -30% 4% 6%
----------- ---------- ---- ----
6,891 $ 6,486 6% 93% 98%
License and
product development 513 133 286% 7% 2%
----------- ---------- ---- ----
Total Revenues $ 7,404 $ 6,619 12% 100% 100%
=========== ========== ==== ====
About OraSure
OraSure Technologies, Inc. develops, manufactures and markets
medical devices and diagnostic products for use by public- and
private-sector clients, clinical laboratories, physicians' offices and
workplace testing. OraSure Technologies is the leading supplier of
oral fluid collection devices and assays to the life insurance
industry and public health markets for the detection of antibodies to
HIV. In addition, the company supplies oral fluid testing solutions
for drugs-of-abuse testing. For more information on the Company please
visit www.orasure.com.
This press release contains certain forward-looking statements,
including with respect to revenues, earnings, expenses, gross margins,
integration savings, manufacturing capacity, publication of technical
data, and product development, performance, shipments and markets.
Actual results could be significantly different. Factors that could
affect results include ability to market products; impact of
competitors, competing products and technology changes; ability to
develop, commercialize and market new products; market acceptance of
oral fluid testing products and up-converting phosphor technology
products; ability to fund research and development and other projects
and operations; ability to obtain and timing of obtaining necessary
regulatory approvals; ability to develop product distribution
channels; uncertainty relating to patent protection and potential
patent infringement claims; ability to enter into international
manufacturing agreements; obstacles to international marketing and
manufacturing of products; loss or impairment of sources of capital;
exposure to product liability and other types of litigation; changes
in international, federal or state laws and regulations; changes in
relationships with strategic partners and reliance on strategic
partners for the performance of critical activities under
collaborative arrangements; changes in accounting practices or
interpretation of accounting requirements; equipment failures and
ability to obtain needed raw materials and components; and general
business and economic conditions. These and other factors are
discussed more fully in the Securities and Exchange Commission filings
of OraSure Technologies, including its Annual Report on Form 10-K for
the year ended December 31, 2000. Although forward-looking statements
help to provide complete 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.
CONTACT:
OraSure Technologies, Inc.
Michelle Sells, 503/641-6115
or
Rich Hooper, 610/882-1820
Investorinfo@orasure.com
www.orasure.com
