OraSure Technologies, Inc. (Nasdaq:OSUR), a market leader in oral
fluid diagnostics, today announced its consolidated financial
results for the first quarter of 2014.
Financial Highlights
- Consolidated net revenues for the first quarter of 2014 were
$23.5 million, an 11% increase from the comparable quarter of 2013.
Net product revenues increased 12% primarily due to higher revenues
from the Company's molecular collection systems subsidiary, DNA
Genotek ("DNAG"), and higher sales of the Company's OraQuick® HCV
test, cryosurgical systems products, and OraQuick® In-Home HIV
test.
- Net revenues generated by DNAG during the first quarter of 2014
were $5.8 million, a 46% increase from the comparable period in
2013. This increase was the result of higher sales to both
commercial and academic customers.
- Net revenues for the Company's OraQuick® rapid HCV test reached
$1.6 million for the first quarter of 2014, an increase of 133%
from the comparable 2013 period. This growth reflects increasing
demand for the product in both the domestic and international
markets.
- Gross sales of the Company's OraQuick® In-Home HIV test were
$2.2 million for the first quarter of 2014 and $1.5 million in the
first quarter of 2013. These gross sales were reduced by customer
allowances for cooperative advertising, cash discounts and other
allowances, resulting in net revenues of $2.0 million and $1.4
million recorded in each respective period. Revenues for these
periods were not recorded using the same revenue recognition
policy. In December 2013, the Company changed its policy from
recognizing revenue upon consummation of a purchase by the consumer
to recognizing revenue upon shipment to the retailer or
distributor. Based on available point-of-sale data, unit purchases
by consumers increased approximately 22% in the first quarter of
2014 compared to the first quarter of 2013.
- Net cryosurgical systems revenues in the first quarter of 2014
were $4.0 million, a 29% increase over the first quarter of 2013.
This increase was primarily due to higher sales in both the U.S.
professional market and the international over-the-counter ("OTC")
market.
- Consolidated net loss for the first quarter of 2014 was $5.6
million, or $0.10 per share, which compares to a net loss of $10.2
million, or $0.18 per share, for the first quarter of 2013. The
improvement in net loss for the quarter resulted primarily from the
higher revenues and lower sales and marketing expenses.
"Solid revenue growth for the first quarter was in line with our
projections and our bottom line performance was better than
expected," said Douglas A. Michels, President and CEO of OraSure
Technologies. "Our business growth continues to be driven primarily
by the strong performance of our molecular collection systems
business and by contributions from our OraQuick® HCV Test and
OraQuick® In-Home HIV Test. We are pleased with our first quarter
results and expect our performance to improve through the remainder
of 2014."
Financial Results
Consolidated net product revenues for the first quarter of 2014
increased 12%, primarily as a result of the higher sales of the
Company's molecular collection systems, infectious disease testing,
and cryosurgical systems products. These increases were partially
offset by lower sales of the Company's substance abuse testing
products largely in the international markets and lower sales of
insurance risk assessment products.
The Company had no consolidated licensing and product
development revenues for the first quarter of 2014 as a result of
the expiration of certain patents licensed to a third party. This
compares to $202,000 recorded for the first quarter of
2013.
Consolidated gross margin for the three months ended March 31,
2014 was 59% compared to 57% for the three months ended March 31,
2013. Gross margin for the current quarter primarily benefited
from improved overhead absorption due to the absence of production
issues which negatively impacted overhead absorption in the first
quarter of 2013. The current quarter margin also benefitted
from a more favorable product mix driven largely by increased DNAG
sales.
Consolidated operating expenses decreased to $19.5 million
during the first quarter of 2014 compared to $22.6 million in the
comparable period of 2013. The decrease was primarily the
result of lower promotional and advertising expenses associated
with the Company's OraQuick® In-Home HIV test. These expenses
totaled $4.6 million during the current quarter, compared to $6.9
million in the first quarter of 2013. Research and development
expenses also decreased $876,000 as a result of lower clinical
trial costs and decreased staffing and supply costs. General
and administrative expenses increased by $337,000 due to higher
consulting costs.
For the three months ended March 31, 2014, the Company recorded
Canadian income tax expense of $131,000. For the three months
ended March 31, 2013, the Company recorded a Canadian income tax
benefit of $410,000 as a result of the loss before income taxes and
certain Canadian research and development and investment tax
credits at DNAG.
The Company's cash balance totaled $84.2 million at March 31,
2014 compared to $93.2 million at December 31, 2013. Working
capital was $96.8 million at March 31, 2014 compared to $100.6
million at December 31, 2013. For the three months ended March
31, 2014, the Company used $7.7 million to fund operations.
Second Quarter 2014
Outlook
The Company expects consolidated net revenues to range from
$25.2 to $25.7 million and is projecting a consolidated net loss of
approximately $0.09 to $0.10 per share for the second quarter of
2014.
Financial Data |
|
|
|
|
|
Condensed Consolidated
Financial Data |
(In thousands, except
per-share data) |
|
|
|
Unaudited |
|
|
|
|
Three months
ended |
|
March
31, |
|
2014 |
2013 |
Results of Operations |
|
|
Net revenues |
$ 23,537 |
$ 21,164 |
Cost of products sold |
9,610 |
9,135 |
Gross profit |
13,927 |
12,029 |
Operating expenses: |
|
|
Research and development |
2,481 |
3,357 |
Sales and marketing |
11,340 |
13,874 |
General and administrative |
5,724 |
5,387 |
Total operating expenses |
19,545 |
22,618 |
Operating loss |
(5,618) |
(10,589) |
Other income (expense) |
118 |
(47) |
Loss before income taxes |
(5,500) |
(10,636) |
Income tax expense (benefit) |
131 |
(410) |
Net loss |
$ (5,631) |
$ (10,226) |
Loss per share: |
|
|
Basic and Diluted |
$ (0.10) |
$ (0.18) |
|
|
|
Weighted average shares: |
|
|
Basic and Diluted |
55,762 |
55,449 |
Summary of Revenues by Market and Product
(Unaudited)
|
Three Months
Ended March 31, |
|
Dollars |
|
Percentage of
Total Net Revenues |
Market |
2014 |
2013 |
% Change |
2014 |
2013 |
|
|
|
|
|
|
Infectious disease testing |
$ 11,064 |
$ 10,687 |
4% |
47% |
49% |
Substance abuse testing |
1,830 |
2,249 |
(19) |
8 |
11 |
Cryosurgical systems |
3,967 |
3,085 |
29 |
17 |
15 |
Molecular collection systems |
5,759 |
3,932 |
46 |
24 |
19 |
Insurance risk assessment |
917 |
1,009 |
(9) |
4 |
5 |
Net product revenues |
23,537 |
20,962 |
12 |
100 |
99 |
Licensing and product development |
-- |
202 |
(100) |
-- |
1 |
Net revenues |
$ 23,537 |
$ 21,164 |
11% |
100% |
100% |
|
|
|
|
|
Three Months
Ended |
|
March
31, |
OraQuick® Revenues |
2014 |
2013 |
% Change |
|
|
|
|
Domestic HIV |
$ 6,618 |
$ 7,672 |
(14)% |
International HIV |
558 |
554 |
1 |
Domestic HIV OTC |
1,953 |
1,442 |
35 |
Net HIV revenues |
9,129 |
9,668 |
(6) |
|
|
|
|
Domestic HCV |
663 |
428 |
55 |
International HCV |
896 |
240 |
273 |
Net HCV revenues |
1,559 |
668 |
133 |
|
|
|
|
Net OraQuick® revenues |
$ 10,688 |
$ 10,336 |
3% |
|
|
|
|
|
Three Months
Ended |
|
March
31, |
Intercept® Revenues |
2014 |
2013 |
% Change |
|
|
|
|
Domestic |
$ 1,250 |
$ 1,404 |
(11)% |
International |
40 |
258 |
(84) |
Net Intercept® revenues |
$ 1,290 |
$ 1,662 |
(22)% |
|
|
|
|
|
Three Months
Ended |
|
March
31, |
Cryosurgical Systems
Revenues |
2014 |
2013 |
% Change |
|
|
|
|
Domestic professional |
$ 1,542 |
$ 891 |
73% |
International professional |
310 |
348 |
(11) |
International over-the-counter |
2,115 |
1,846 |
15 |
Net cryosurgical systems
revenues |
$ 3,967 |
$ 3,085 |
29% |
|
|
|
Condensed Consolidated
Balance Sheets (Unaudited) |
|
March 31, 2014 |
December 31,
2013 |
Assets |
|
|
|
|
|
Cash |
$ 84,193 |
$ 93,191 |
Accounts receivable, net |
13,287 |
12,957 |
Inventories |
11,994 |
11,444 |
Other current assets |
2,281 |
1,983 |
Property and equipment, net |
17,826 |
17,933 |
Intangible assets, net |
20,659 |
22,226 |
Goodwill |
22,860 |
23,782 |
Other non-current assets |
980 |
729 |
Total assets |
$ 174,080 |
$ 184,245 |
|
|
|
Liabilities and Stockholders' Equity |
|
|
Accounts payable |
$ 4,114 |
$ 4,834 |
Deferred revenue |
954 |
1,119 |
Accrued expenses |
9,902 |
13,032 |
Other non-current liabilities |
961 |
677 |
Deferred income taxes |
3,435 |
3,437 |
Stockholders' equity |
154,714 |
161,146 |
Total liabilities and
stockholders' equity |
$ 174,080 |
$ 184,245 |
|
|
|
|
Three months
ended |
|
March
31, |
Additional Financial
Data (Unaudited) |
2014 |
2013 |
|
|
|
Capital expenditures |
$ 647 |
$ 480 |
Depreciation and amortization |
$ 1,539 |
$ 1,602 |
Stock based compensation |
$ 1,406 |
$ 1,394 |
Cash used in operating activities |
$ 7,668 |
$ 7,674 |
Conference Call
The Company will host a conference call and audio webcast to
discuss the Company's 2014 first quarter financial results, certain
business developments and financial guidance for the second quarter
of 2014, beginning today at 5:00 p.m. Eastern Time (2:00 p.m.
Pacific Time). On the call will be Douglas A. Michels, President
and Chief Executive Officer, Ronald H. Spair, Chief Financial
Officer and Chief Operating Officer, and Kathleen Weber, Senior
Vice President and General Manager, Consumer Products. The call
will include prepared remarks by management and a question and
answer session.
In order to listen to the conference call, please either dial
877-348-9357 (Domestic) or 970-315-0488 (International) and
reference Conference ID #31956599 or go to OraSure Technologies'
web site, www.orasure.com, and click on the Investor Relations
page. Please click on the webcast link and follow the prompts for
registration and access 10 minutes prior to the call. A replay of
the call will be archived on OraSure Technologies' 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 May 14, 2014, by
dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and
entering the Conference ID #31956599.
About OraSure Technologies
OraSure Technologies is a leader in the development, manufacture
and distribution of oral fluid diagnostic and collection devices
and other technologies designed to detect or diagnose critical
medical conditions. Its innovative products include rapid tests for
the detection of antibodies to HIV and HCV at the point of care and
testing solutions for detecting various drugs of abuse. The Company
sells the OraQuick® In-Home HIV Test, the first and only rapid HIV
test approved by the U.S. Food and Drug Administration for sale to
the consumer over-the-counter market in the U.S. In addition, the
Company is a leading provider of oral fluid sample collection,
stabilization and preparation products for molecular diagnostic
applications. OraSure's portfolio of products is sold globally to
various clinical laboratories, hospitals, clinics, community-based
organizations and other public health organizations, research and
academic institutions, distributors, government agencies,
physicians' offices, and commercial and industrial entities. The
Company's products enable healthcare providers to deliver critical
information to patients, empowering them to make decisions to
improve and protect their health. For more information on the
Company, please visit www.orasure.com.
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 market and sell products, whether through
our internal, direct sales force or third parties; ability to
manufacture products in accordance with applicable specifications,
performance standards and quality requirements; 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 FDA or
other regulators; changes in relationships, including disputes or
disagreements, with strategic partners or other parties and
reliance on strategic partners for the performance of critical
activities under collaborative arrangements; failure of
distributors or other customers to meet purchase forecasts,
historic purchase levels or minimum purchase requirements for the
Company's products; impact of replacing distributors; inventory
levels at distributors and other customers; ability of DNA Genotek
to achieve its financial and strategic objectives and continue to
increase its revenues; ability to identify, complete, integrate and
realize the full benefits of future acquisitions; impact of
competitors, competing products and technology changes; impact of
negative economic conditions, high unemployment and poor credit
conditions; reduction or deferral of public funding available to
customers; competition from new or better technology or lower cost
products; ability to develop, commercialize and market new
products, including the OraQuick® In-Home HIV test; market
acceptance of oral fluid testing or other products; changes in
market acceptance of products based on product performance or other
factors; 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 products and components; availability of
related products produced by third parties or products required for
use of the Company's products; history of losses and ability to
achieve sustained profitability; ability to utilize net operating
loss carry forwards 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 the impact of changes in
international funding sources and testing algorithms; adverse
movements in foreign currency exchange rates; loss or impairment of
sources of capital; ability to retain qualified personnel;
exposure to 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; and general
political, business and economic conditions. These and other
factors are discussed more fully in the Company's Securities
and Exchange Commission filings, including its registration
statements, Annual Report on Form 10-K for the year ended December
31, 2013, Quarterly Reports on Form 10-Q, and other filings with
the SEC. Although forward-looking statements help to provide
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: Ronald H. Spair
Chief Financial Officer
610-882-1820
Investorinfo@orasure.com
www.orasure.com
OraSure Technologies (NASDAQ:OSUR)
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