OraSure Announces 2014 Second Quarter Financial Results
Financial Highlights
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Consolidated net revenues for the second quarter of 2014 were
$26.4 million , an 8% increase from the comparable quarter of 2013. Consolidated net revenues for the six months endedJune 30, 2014 were$49.9 million , a 10% increase from the comparable period of 2013. These increases were primarily due to higher sales of the Company's OraQuick® HCV test, higher revenues from the Company's molecular collection systems subsidiary, DNA Genotek ("DNAG"), higher sales of the Company's cryosurgical systems products and higher licensing and product development revenues.
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Net revenues for the Company's OraQuick® rapid HCV test were
$2.2 million and$3.8 million for the second quarter and first six months of 2014, respectively, an increase of 134% from each of the comparable 2013 periods. This growth reflects increasing demand for the product in both the domestic and international markets.
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Net revenues generated by DNAG during the second quarter of 2014 were
$4.9 million , a 5% increase from the comparable period in 2013. DNAG net revenues during the six months endedJune 30, 2014 were$10.7 million , a 24% increase from the comparable period in 2013. The increase in the quarter was the result of higher sales to academic customers while the increase for the six month period was the result of higher sales to both commercial and academic customers.
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Net cryosurgical systems revenues in the second quarter of 2014 were
$4.9 million , an 18% increase over the second quarter of 2013. This increase was primarily due to higher sales in the international over-the-counter ("OTC") market. Net cryosurgical systems revenues for the six months endedJune 30, 2014 were$8.9 million , a 22% increase over the comparable period of 2013. This increase was primarily due to higher sales in both the U.S. professional market and the international OTC market.
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Licensing and product development revenues were
$775,000 for both the quarter and six months endedJune 30, 2014 , and represent the recognition of payments under the Company's' HCV collaboration withAbbVie . In exchange for exclusive promotion rights and certain services provided by the Company, the agreement withAbbVie provides for payments totaling up to$75.0 million over the life of the agreement, which runs throughDecember 31, 2019 . The first such payment of$15.0 million required under the agreement was received inJuly 2014 . Licensing and product development revenues in 2013 represent royalties paid on domestic outsales of Merck's OTC cryosurgical wart removal product.
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Consolidated net income for the second quarter of 2014 was
$2.5 million , or$0.04 per share on a fully diluted basis, which compares to a net loss of$5.3 million , or$0.10 per share, for the second quarter of 2013. Consolidated net loss for the six months endedJune 30, 2014 was$3.1 million , or$0.06 per share, which compares to a net loss of$15.5 million , or$0.28 per share, for the comparable period of 2013. The improvement in the Company's bottom line for the quarter and six month period resulted primarily from the inclusion of a$5.5 million payment due under the terms of the termination of a drug assay collaboration with Roche Diagnostics, the higher revenues in each period and lower promotional costs for the OraQuick® In-Home HIV Test.
"We are pleased with the Company's financial performance for the second quarter and first six months of the year," said
Financial Results
Consolidated net product revenues for the second quarter of 2014 increased 6%, primarily as a result of higher sales of the Company's OraQuick® HCV, cryosurgical systems, and molecular collection systems products. These increases were partially offset by lower domestic sales of the OraQuick® professional HIV product, OraQuick® In-Home HIV test and insurance risk assessment products.
Consolidated net product revenues for the six month period ended
Consolidated licensing and product development revenues for the second quarter and first six months of 2014 were
Consolidated gross margin for the three and six months ended
Consolidated operating expenses decreased to
For the three and six months ended
The Company's cash and short-term investment balance totaled
Third Quarter 2014 Outlook
The Company expects consolidated net revenues to range from
Financial Data
Condensed Consolidated Financial Data | ||||
(In thousands, except per-share data) | ||||
Unaudited | ||||
Three months ended | Six months ended | |||
June 30, | June 30, | |||
2014 | 2013 | 2014 | 2013 | |
Results of Operations | ||||
Net revenues | $ 26,401 | $ 24,337 | $ 49,938 | $ 45,501 |
Cost of products sold | 10,385 | 9,838 | 19,995 | 18,973 |
Gross profit | 16,016 | 14,499 | 29,943 | 26,528 |
Operating expenses: | ||||
Research and development | 2,771 | 2,693 | 5,252 | 6,050 |
Sales and marketing | 10,272 | 12,369 | 21,612 | 26,243 |
General and administrative | 5,976 | 5,013 | 11,700 | 10,400 |
Gain on contract termination settlement | (5,500) | -- | (5,500) | -- |
Total operating expenses | 13,519 | 20,075 | 33,064 | 42,693 |
Operating income (loss) | 2,497 | (5,576) | (3,121) | (16,165) |
Other income (expense) | (142) | 42 | (24) | (5) |
Income (loss) before income taxes | 2,355 | (5,534) | (3,145) | (16,170) |
Income tax benefit | (174) | (249) | (43) | (659) |
Net income (loss) | $ 2,529 | $ (5,285) | $ (3,102) | $ (15,511) |
Earnings (loss) per share: | ||||
Basic | $ 0.05 | $ (0.10) | $ (0.06) | $ (0.28) |
Diluted | $ 0.04 | $ (0.10) | $ (0.06) | $ (0.28) |
Weighted average shares: | ||||
Basic | 55,907 | 55,559 | 55,846 | 55,504 |
Diluted | 57,243 | 55,559 | 55,846 | 55,504 |
Summary of Revenues by Market and Product (Unaudited)
Three Months Ended June 30, | |||||
Dollars |
Percentage of Total Net Revenues |
||||
Market | 2014 | 2013 | % Change | 2014 | 2013 |
Infectious disease testing | $ 12,668 | $ 11,966 | 6% | 47% | 49% |
Substance abuse testing | 2,208 | 2,113 | 4 | 8 | 9 |
Cryosurgical systems | 4,920 | 4,177 | 18 | 19 | 17 |
Molecular collection systems | 4,896 | 4,654 | 5 | 19 | 19 |
Insurance risk assessment | 934 | 1,153 | (19) | 4 | 5 |
Net product revenues | 25,626 | 24,063 | 6 | 97 | 99 |
Licensing and product development | 775 | 274 | 183 | 3 | 1 |
Net revenues | $ 26,401 | $ 24,337 | 8% | 100% | 100% |
Six Months Ended June 30, | |||||
Dollars |
Percentage of Total Net Revenues |
||||
Market | 2014 | 2013 | % Change | 2014 | 2013 |
Infectious disease testing | $ 23,732 | $ 22,654 | 5% | 47% | 50% |
Substance abuse testing | 4,038 | 4,362 | (7) | 8 | 9 |
Cryosurgical systems | 8,887 | 7,261 | 22 | 18 | 16 |
Molecular collection systems | 10,655 | 8,586 | 24 | 21 | 19 |
Insurance risk assessment | 1,851 | 2,162 | (14) | 4 | 5 |
Net product revenues | 49,163 | 45,025 | 9 | 98 | 99 |
Licensing and product development | 775 | 476 | 63 | 2 | 1 |
Net revenues | $ 49,938 | $ 45,501 | 10% | 100% | 100% |
Three Months Ended | Six Months Ended | |||||
June 30, | June 30, | |||||
OraQuick® Revenues | 2014 | 2013 | % Change | 2014 | 2013 | % Change |
Domestic HIV | $ 7,720 | $ 8,088 | (5)% | $14,339 | $ 15,761 | (9)% |
International HIV | 848 | 745 | 14 | 1,405 | 1,300 | 8 |
Domestic HIV OTC | 1,669 | 1,993 | (16) | 3,622 | 3,435 | 5 |
Net HIV revenues | 10,237 | 10,826 | (5) | 19,366 | 20,496 | (6) |
Domestic HCV | 1,221 | 690 | 77 | 1,884 | 1,119 | 68 |
International HCV | 974 | 247 | 294 | 1,870 | 486 | 285 |
Net HCV revenues | 2,195 | 937 | 134 | 3,754 | 1,605 | 134 |
Net OraQuick® revenues | $ 12,432 | $ 11,763 | 6% | $ 23,120 | $ 22,101 | 5% |
Three Months Ended | Six Months Ended | |||||
June 30, | June 30, | |||||
Intercept® Revenues | 2014 | 2013 | % Change | 2014 | 2013 | % Change |
Domestic | $ 1,616 | $ 1,342 | 20% | $ 2,866 | $ 2,745 | 4% |
International | 33 | 98 | (66) | 73 | 356 | (79) |
Net Intercept® revenues | $ 1,649 | $ 1,440 | 15% | $ 2,939 | $ 3,101 | (5)% |
Three Months Ended | Six Months Ended | |||||
June 30, | June 30, | |||||
Cryosurgical Systems Revenues | 2014 | 2013 | % Change | 2014 | 2013 | % Change |
Domestic professional | $ 1,469 | $ 1,497 | (2)% | $ 3,011 | $ 2,388 | 26% |
International professional | 229 | 257 | (11) | 538 | 605 | (11) |
International over-the-counter | 3,222 | 2,423 | 33 | 5,338 | 4,268 | 25 |
Net cryosurgical systems revenues | $ 4,920 | $ 4,177 | 18% | $ 8,887 | $ 7,261 | 22% |
Condensed Consolidated Balance Sheets (Unaudited) | ||
June 30, 2014 | December 31, 2013 | |
Assets | ||
Cash | $ 75,832 | $ 93,191 |
Short-term investments | 4,437 | -- |
Accounts receivable, net | 14,152 | 12,957 |
Inventories | 13,229 | 11,444 |
Other current assets | 8,155 | 1,983 |
Property and equipment, net | 18,471 | 17,933 |
Intangible assets, net | 20,443 | 22,226 |
Goodwill | 23,674 | 23,782 |
Other non-current assets | 1,172 | 729 |
Total assets | $ 179,565 | $ 184,245 |
Liabilities and Stockholders' Equity | ||
Accounts payable | $ 4,647 | $ 4,834 |
Deferred revenue | 694 | 1,119 |
Accrued expenses | 9,366 | 13,032 |
Other non-current liabilities | 1,157 | 677 |
Deferred income taxes | 3,413 | 3,437 |
Stockholders' equity | 160,288 | 161,146 |
Total liabilities and stockholders' equity | $ 179,565 | $ 184,245 |
Six months ended | ||
June 30, | ||
Additional Financial Data (Unaudited) | 2014 | 2013 |
Capital expenditures | $ 1,988 | $ 1,092 |
Depreciation and amortization | $ 3,108 | $ 3,221 |
Stock based compensation | $ 2,869 | $ 2,835 |
Cash used in operating activities | $ 10,397 | $ 9,278 |
Conference Call
The Company will host a conference call and audio webcast to discuss the Company's 2014 second quarter financial results, certain business developments and financial guidance for the third quarter of 2014, beginning today at
In order to listen to the conference call, please either dial 844-831-3030 (Domestic) or 315-625-6887 (International) and reference Conference ID #74668640 or go to
About
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 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
CONTACT:Ronald H. Spair Chief Financial Officer 610-882-1820 Investorinfo@orasure.com www.orasure.com