OraSure Technologies, Inc. (Nasdaq:OSUR), a market leader in oral
fluid diagnostics, today announced total revenues of $19.1 million
for the three months ended June 30, 2011, compared to $19.2 million
recorded for the three months ended June 30, 2010.
Product revenues for the current quarter increased 6% as higher
sales of the Company's infectious disease and substance abuse
testing products were partially offset by lower sales of its
cryosurgical systems and insurance risk assessment products. The
higher product revenues were offset by a reduction in licensing and
product development revenues caused by the absence of a $1.0
million milestone payment received in the second quarter of 2010
under the terms of the Company's collaboration with Merck related
to the development and promotion of the OraQuick® rapid HCV
test.
The Company reported a net loss of $2.4 million, or $0.05 per
share, for the second quarter of 2011, compared to a net loss of
$553,000, or $0.01 per share, for the second quarter of 2010.
"We are pleased to report a solid second quarter that exceeded
our guidance for both revenues and the bottom line," said Douglas
A. Michels, President and CEO of OraSure Technologies. "There have
also been significant developments on the strategic front. We
recently announced an agreement to acquire DNA Genotek which will
strengthen our oral fluid diagnostics franchise and diversify our
business into the fast-growing molecular diagnostics
market. In addition, we continue to make good progress on our
major clinical programs."
For the six months ended June 30, 2011, the Company recorded
revenues of $36.5 million, compared to $37.2 million for the six
months ended June 30, 2010. Product revenues for the current
six month period increased 4% but were partially offset by lower
licensing and product development revenues caused by the absence of
$2.0 million in milestone payments received from Merck during the
year ago period under the terms of the Company's HCV collaboration
agreement noted above.
The Company recorded a net loss of $5.0 million, or $0.11 per
share, for the six months ended June 30, 2011, compared to a net
loss of $2.7 million, or $0.06 per share, for the six months ended
June 30, 2010.
Gross margin in the three and six months ended June 30, 2011 was
64%, compared to 63% for the comparable periods of 2010. Gross
margin in 2010 benefited from the HCV milestone payments received
from Merck during those periods. Gross margin for 2011 benefited
from lower direct labor costs and improved absorption of overhead
costs as a result of staffing optimization and a change to
automated manufacturing during 2011. These changes
accounted for 3.2 and 2.8 percentage point increases in margin for
the three and six month periods of 2011, respectively. These
improvements more than offset the negative margin impact associated
with the absence of the HCV milestone revenues in 2011.
Operating expenses for the second quarter of 2011 increased to
$14.6 million, from $12.7 million in the comparable period of 2010,
primarily as a result of higher research and development expenses
due to clinical trial spending related to the Company's OraQuick®
HIV over-the-counter product. This increase was partially
offset by lower sales and marketing expenses. General and
administrative expenses remained flat. Operating expenses for
the six months ended June 30, 2011 were $28.4 million, compared to
$26.3 million for the comparable period in 2010. Increases in
research and development expenses were partially offset by lower
sales and marketing and general and administrative expenses.
Cash used in operating activities for the six months ended June
30, 2011 was $373,000, an improvement of $2.7 million when compared
to the $3.1 million used during the six months ended June 30,
2010. Cash, cash equivalents and short-term investments
totaled $75.4 million and working capital was $76.9 million at June
30, 2011, compared to $75.7 million and $77.8 million,
respectively, at December 31, 2010.
Third Quarter 2011 Outlook
As previously announced, the Company has entered into an
agreement to acquire DNA Genotek Inc. for approximately $53 million
in cash, subject to certain adjustments. Closing of the
acquisition is expected to occur during the third quarter of
2011.
Because this transaction has not yet closed, the Company is not
currently able to provide financial guidance that reflects the full
impact of this acquisition. Once the transaction has closed
and the Company has had an opportunity to complete an allocation of
the purchase price, the Company expects to be able to provide
financial guidance that reflects the consolidated performance of
both companies. Excluding the impact of DNA Genotek, the Company
expects total revenues of approximately $19.0 million to $19.5
million for the third quarter of 2011. In addition, the
Company is projecting a third quarter net loss per share of
approximately $0.07, which includes certain transaction costs
associated with the DNA Genotek acquisition.
Financial Data
Condensed Financial
Data |
(In thousands, except
per-share data) |
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
Three
months ended June 30, |
Six months ended
June 30, |
|
2011 |
2010 |
2011 |
2010 |
Results of Operations |
|
|
|
|
Revenues |
$19,064 |
$19,218 |
$36,477 |
$37,163 |
Cost of products sold |
6,803 |
7,040 |
12,949 |
13,582 |
Gross profit |
12,261 |
12,178 |
23,528 |
23,581 |
Operating expenses: |
|
|
|
|
Research and development |
5,143 |
3,029 |
9,563 |
6,135 |
Sales and marketing |
5,352 |
5,610 |
10,284 |
11,305 |
General and administrative |
4,125 |
4,074 |
8,593 |
8,852 |
Total operating expenses |
14,620 |
12,713 |
28,440 |
26,292 |
Operating loss |
(2,359) |
(535) |
(4,912) |
(2,711) |
Other expense |
(79) |
(18) |
(124) |
(37) |
Loss before income taxes |
(2,438) |
(553) |
(5,036) |
(2,748) |
Income tax benefit |
− |
− |
− |
− |
Net loss |
$(2,438) |
$(553) |
$(5,036) |
$(2,748) |
Loss per share: |
|
|
|
|
Basic and Diluted |
$(0.05) |
$(0.01) |
$(0.11) |
$(0.06) |
|
|
|
|
|
Weighted average shares: |
|
|
|
|
Basic and Diluted |
46,814 |
46,202 |
46,667 |
46,157 |
|
|
|
Three months
ended June 30, |
|
Dollars |
% |
Percentage of
Total Revenues |
Market
Revenues (Unaudited) |
2011 |
2010 |
Change |
2011 |
2010 |
|
|
|
|
|
|
Infectious disease testing |
$11,284 |
$9,974 |
13% |
59% |
52% |
Substance abuse testing |
3,185 |
3,052 |
4 |
17 |
16 |
Cryosurgical systems |
2,802 |
3,120 |
(10) |
15 |
16 |
Insurance risk assessment |
1,429 |
1,558 |
(8) |
7 |
8 |
Product revenues |
18,700 |
17,704 |
6 |
98 |
92 |
Licensing and product development |
364 |
1,514 |
(76) |
2 |
8 |
Total revenues |
$19,064 |
$19,218 |
(1)% |
100% |
100% |
|
|
|
Six months ended
June 30, |
|
Dollars |
% |
Percentage of
Total Revenues |
Market
Revenues (Unaudited) |
2011 |
2010 |
Change |
2011 |
2010 |
|
|
|
|
|
|
Infectious disease testing |
$21,246 |
$19,454 |
9% |
58% |
52% |
Substance abuse testing |
6,246 |
5,766 |
8 |
17 |
16 |
Cryosurgical systems |
5,512 |
6,114 |
(10) |
15 |
16 |
Insurance risk assessment |
2,745 |
2,942 |
(7) |
8 |
8 |
Product revenues |
35,749 |
34,276 |
4 |
98 |
92 |
Licensing and product development |
728 |
2,887 |
(75) |
2 |
8 |
Total revenues |
$36,477 |
$37,163 |
(2)% |
100% |
100% |
|
|
|
|
|
Three
months ended June 30, |
% |
Six months
ended June 30, |
% |
OraQuick®
Revenues |
2011 |
2010 |
Change |
2011 |
2010 |
Change |
Domestic |
$10,168 |
$9,248 |
10% |
$19,069 |
$17,979 |
6% |
International |
858 |
317 |
171 |
1,604 |
655 |
145 |
Total OraQuick® revenues |
$11,026 |
$9,565 |
15% |
$20,673 |
$18,634 |
11% |
|
|
|
|
|
|
|
|
Three
months ended June 30, |
% |
Six months
ended June 30, |
% |
Intercept®
Revenues |
2011 |
2010 |
Change |
2011 |
2010 |
Change |
|
|
|
|
|
|
|
Domestic |
$2,083 |
$1,949 |
7% |
$3,962 |
$3,477 |
14% |
International |
514 |
443 |
16 |
1,035 |
960 |
8 |
Total Intercept® revenues |
$2,597 |
$2,392 |
9% |
$4,997 |
$4,437 |
13% |
|
|
|
|
|
|
|
|
Three
months ended June 30, |
% |
Six months
ended June 30, |
% |
Cryosurgical
Systems Revenues |
2011 |
2010 |
Change |
2011 |
2010 |
Change |
|
|
|
|
|
|
|
Professional domestic |
$1,713 |
$1,575 |
9% |
$3,055 |
$2,787 |
10% |
Professional international |
247 |
270 |
(9) |
587 |
539 |
9 |
Over-the-counter |
842 |
1,275 |
(34) |
1,870 |
2,788 |
(33) |
Total cryosurgical systems
revenues |
$2,802 |
$3,120 |
(10)% |
$5,512 |
$6,114 |
(10)% |
|
|
|
Balance
Sheets (Unaudited) |
June 30, 2011 |
December 31,
2010 |
Assets |
|
|
Cash, cash equivalents and short-term
investments |
$75,399 |
$75,738 |
Accounts receivable, net |
11,744 |
12,471 |
Inventories |
8,147 |
7,346 |
Other current assets |
1,719 |
1,930 |
Property and equipment, net |
19,479 |
19,611 |
Other non-current assets |
4,768 |
5,424 |
Total assets |
$121,256 |
$122,520 |
|
|
|
Liabilities
and Stockholders' Equity |
|
|
Current portion of long-term debt |
$7,542 |
$7,791 |
Accounts payable |
3,724 |
2,899 |
Accrued expenses |
8,788 |
8,987 |
Stockholders' equity |
101,202 |
102,843 |
Total liabilities and
stockholders' equity |
$121,256 |
$122,520 |
|
|
|
|
Six months
ended June 30, |
Additional Financial
Data (Unaudited) |
2011 |
2010 |
|
|
|
Capital expenditures |
$1,180 |
$1,113 |
Depreciation and amortization |
$1,684 |
$1,331 |
Stock based compensation |
$1,931 |
$1,697 |
Cash used in operating activities |
$373 |
$3,080 |
Accounts receivable – days
sales outstanding |
58 days |
63 days |
Conference Call
The Company will host a conference call and audio webcast to
discuss the Company's 2011 second quarter financial results,
business developments and certain 2011 financial guidance,
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, and Ronald H. Spair, Chief Financial Officer and
Chief Operating Officer. 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 #84284990, or go to OraSure Technologies'
web site, www.orasure.com, and click on the Investor Info link. 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 August
10, 2011, by dialing 855-859-2056 (Domestic) or 404-537-3406
(International) and entering the Conference ID #84284990.
About OraSure Technologies
OraSure Technologies is a leader in the development, manufacture
and distribution of oral fluid diagnostic devices and other
technologies designed to diagnose critical medical conditions and
diseases. 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. These
products enable healthcare providers to deliver critical
information to patients, empowering them to make decisions to
improve and protect their health. OraSure's products are sold
globally to various clinical laboratories, hospitals, clinics,
community-based organizations and other public health
organizations, distributors, government agencies, physicians'
offices, and commercial and industrial entities. For more
information on the Company, please go to www.orasure.com.
The OraSure Technologies, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6440
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 an
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; 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 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; ability to
identify, complete, integrate, and realize the full benefits of
potential future acquisitions, including the Company's acquisition
of DNA Genotek; impact of competitors, competing products and
technology changes; impact of the economic downturn, 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; market acceptance of oral
fluid testing or other products; changes in market acceptance of
products based on product performance, extended shelf life 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 product components; availability of related
products produced by third parties or products required for use of
our 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 our 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; loss or impairment of
sources of capital; ability to meet financial covenants in
agreements with financial institutions; ability to refinance
outstanding debt under expiring credit facilities on acceptable
terms or at all; 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, 2010, 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
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