OraSure Technologies Announces 2001 Financial Results
The Company's net loss was approximately $3.7 million or $(0.10) per share for the full year 2001 and $2.3 million or $(0.06) per share for the fourth quarter. These results represent an improvement from the net loss of $12.7 million or $(0.36) per share for the full year 2000 and the net loss of $3.7 million or $(0.10) per share in the fourth quarter of 2000, which included merger-related charges of $7.6 million and $1.7 million, respectively.
The increase in revenues was primarily the result of increased market penetration of the Company's oral fluid substance abuse and infectious disease testing products and increased license and product development revenue. These increases were partially offset by a decline in revenues in the insurance risk assessment market due to customer inventory consolidation and increased efficiencies at certain customers as well as declines in other product lines due to generally soft market conditions.
The Company's gross margin for the full year 2001 improved from 61% to 62%, as a result of lower material costs, productivity gains and higher license and development revenues, which were partially offset by the recognition of an inventory reserve in the fourth quarter of $0.6 million related to OraQuick(R) HIV tests manufactured for sale to the Company's African distributor. For the fourth quarter of 2001, the Company's gross margin declined from 63% to 53%, primarily as a result of the OraQuick(R) inventory reserve established during that period. Because of the repeated failure by the Company's African distributor to meet its contractually-required minimum purchase commitments, the Company recently reevaluated its international strategy for OraQuick(R) distribution and terminated its agreement with this distributor. The resulting inventory reserve was required in light of this action and serious concerns surrounding the product's remaining shelf-life in relation to the Company's ability to rapidly establish a new distribution channel in Africa to sell the product.
Operating expenses for the fourth quarter, excluding merger-related charges in 2000, declined 4% from a year ago to approximately $6.8 million. For the full year ended December 31, 2001, operating expenses, excluding merger-related charges, remained flat at approximately $24 million.
"In 2001, we made great advances towards establishing OraSure Technologies as the best oral fluid diagnostic company in the world," said Mike Gausling, President and Chief Executive Officer. "We had strong sales growth for both Intercept(R) and OraSure(R), our lab-based oral fluid substance abuse and infectious disease testing products. We also made major advances in pioneering the use of oral fluids outside the lab, with the FDA submissions for our OraQuick(R) rapid HIV test and our UPlink(TM) drugs of abuse rapid detection system. In our first full year as OraSure, we also integrated the Epitope and STC cultures, consolidated manufacturing operations, and improved operating efficiencies. While making huge progress, we still need to improve our management information systems, reduce our development and regulatory review cycles and improve our overall communications."
The Company continues to target revenue growth of up to 30% for 2002 to approximately $42 million, and profitability in the second half of 2002 and for the year as a whole. However, the Company's ability to achieve these results is dependent on several factors, including the timely receipt of regulatory approvals, market acceptance of new products and the timely startup of several new distributors for its products.
Internet Audio BroadcastOraSure Technologies will host a conference call with analysts and an audio webcast to discuss these results beginning at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time) today. The call will include brief remarks by management and a question and answer session. In order to listen to the conference call, please either dial 800/262-1292 (Domestic) or 719/457-2680 (International) and enter the access code 532779, or go to OraSure's web site, www.orasure.com, at least ten minutes prior to the start of the call to register, and download and install any necessary audio software. A replay will be archived on OraSure's 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 February 18, 2002 by dialing 888/203-1112 (Domestic) or 719/457-0820 (International) and entering the confirmation number 532779.
Important InformationThis press release contains certain forward-looking statements with respect to revenues, earnings, products, regulatory filings and markets. Actual results could be significantly different. Factors that could affect results include the 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; ability to sell products internationally; 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; customer inventory practices and consolidations; equipment failures and ability to obtain needed raw materials and components; the impact of terrorist attacks and civil unrest; and general business, political and economic conditions. These and other factors are discussed more fully in the Securities and Exchange Commission (the "SEC") filings of OraSure Technologies, including its registration statements, its Annual Report on Form 10-K for the year ended December 31, 2000, and its most recent Quarterly Report on Form 10-Q. 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.
About OraSure TechnologiesOraSure Technologies, Inc. is the market leader for oral fluid diagnostics. The Company develops, manufactures, and markets medical devices and diagnostic products for use by insurance companies, public health agencies, clinical laboratories, physicians' offices, and workplace sites. For more information on the Company, please visit www.orasure.com.
Condensed Financial Data
(In thousands, except per-share data)
(Unaudited)
Three months ended Year ended
December 31, December 31,
----------------- -------------------
2001 2000 2001 2000
---- ---- ---- ----
Results of Operations
Revenues $ 8,063 $ 7,786 $32,573 $ 28,788
Cost of products sold 3,754 2,892 12,334 11,102
-------- -------- -------- ---------
Gross margin 4,309 4,894 20,239 17,686
Operating expenses 6,802 7,077 24,121 24,208
Merger - related costs - 1,688 - 7,607
Restructuring - related costs - - 450 -
-------- -------- -------- ---------
Operating loss (2,493) (3,871) (4,332) (14,129)
Other income (expense), net 190 218 604 1,382
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Net loss $(2,303) $(3,653) $(3,728) $(12,747)
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Net loss per common share:
Basic and diluted $ (0.06) $ (0.10) $ (0.10) $ (0.36)
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Weighted average number
of common shares outstanding:
Basic and diluted 37,246 36,361 36,868 35,002
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Condensed Balance Sheet 12/31/01 12/31/00
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Assets
Cash and short-term investments $ 15,191 $ 20,052
Accounts receivable, net 6,058 5,277
Inventories 4,445 1,496
Other current assets 1,114 1,289
Property and equipment, net 7,800 6,738
Other non-current assets 2,677 2,884
--------- ---------
Total assets $ 37,285 $ 37,736
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Liabilities and Stockholders' Equity
Current portion of long-term debt $ 1,058 $ 1,125
Accounts payable 2,874 1,523
Accrued expenses 3,112 4,047
Long-term debt, less current portion 3,586 4,644
Other liabilities 114 225
Stockholders' equity, net 26,541 26,172
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Total liabilities and stockholders' equity $ 37,285 $ 37,736
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Revenue Summary By Principal Markets
(Dollars in thousands, unaudited)
% Percentage of
Dollars Change Total Revenues
-----------------------------------
Three Months Ended December 31, 2001 2000 2001 2000
---- ---- ---- ----
Product Revenues
Insurance risk assessment $2,333 $3,621 (36)% 29% 47%
Infectious disease testing 1,569 1,000 57% 20% 13%
Substance abuse testing 2,043 979 109% 25% 12%
Physicians' office therapies 1,944 2,098 (7)% 24% 27%
------ ------ ----- -----
7,889 7,698 2% 98% 99%
License and product development 174 88 98% 2% 1%
------ ------ ----- -----
Total revenues $8,063 $7,786 4% 100% 100%
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% Percentage of
Dollars Change Total Revenues
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Year Ended December 31, 2001 2000 2001 2000
---- ---- ---- ----
Product Revenues
Insurance risk assessment $11,713 $14,693 (20)% 36% 51%
Infectious disease testing 5,754 3,453 67% 18% 12%
Substance abuse testing 6,955 3,172 119% 21% 11%
Physicians' office therapies 6,674 6,778 (1)% 20% 24%
------ ------ ----- -----
31,096 28,096 11% 95% 98%
License and product development 1,477 692 113% 5% 2%
------ ------ ----- -----
Total revenues $32,573 $28,788 13% 100% 100%
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www.orasure.com
CONTACT: OraSure Technologies, Inc.
Ronald H. Spair, Chief Financial Officer
610/882-1820
Investorinfo@orasure.com
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