OraSure Technologies, Inc. (Nasdaq:OSUR), a market leader in oral
fluid diagnostics, today announced its consolidated financial
results for the fourth quarter and full year of 2011.
Financial Highlights
- Consolidated revenues were $23.7 million for the fourth quarter
of 2011, a 26% increase from the comparable quarter of 2010.
Revenues for the current quarter included $19.5 million from
OraSure operations and $4.2 million from DNA Genotek ("DNAG")
operations. The Company completed its acquisition of DNAG on August
17, 2011.
- Consolidated revenues were $81.9 million for the full-year
2011, a 9% increase from 2010. Full-year revenues included $75.7
million from OraSure operations and $6.2 million from DNAG
operations.
- Consolidated net income for the fourth quarter of 2011 was
$115,000, or $0.00 per share, which compares to a net loss of $1.0
million, or $0.02 per share, for the fourth quarter of
2010. The current quarter net income includes a net loss of
$195,000, and an income tax benefit of $553,000, both attributable
to DNAG.
- Consolidated net loss for the full-year 2011 totaled $8.8
million, or $0.19 per share, which compares to a net loss of $3.5
million, or $0.08 per share, for 2010. The current year loss
includes a $693,000 net loss attributable to DNAG, which reflects
$2.1 million in non-cash charges associated with amortization of
intangible assets and certain purchase accounting inventory
adjustments related to the acquisition, partially offset by
$869,000 in related tax benefits. The 2011 consolidated net
loss also includes approximately $2.6 million of
acquisition-related transaction costs incurred by OraSure and $7.9
million of clinical trial spending related to the Company's
OraQuick® HIV over-the-counter ("OTC") product.
"During the fourth quarter of 2011, we achieved two major
milestones in our principal clinical development programs," said
Douglas A. Michels, President and CEO of OraSure
Technologies. "We successfully obtained a CLIA waiver for our
OraQuick® HCV rapid test, thereby substantially expanding the
potential market for this product, and we filed with the FDA the
final of three modules to our pre-market approval application for
an OraQuick® HIV OTC test. These significant developments
along with the acquisition of DNA Genotek earlier in the year,
resulted in a successful 2011 and will provide us with the
opportunity to drive growth through new product offerings and
access to new markets in 2012 and years to come."
Financial Results
Excluding DNAG sales, product revenues for the quarter and year
ended December 31, 2011 increased 4% and 5%, respectively,
primarily as a result of higher sales of the Company's infectious
disease testing, substance abuse and cryosurgical systems products,
partially offset by lower sales of its insurance risk assessment
products. Licensing and product development revenues for the
full year decreased by $2.6 million primarily as a result of the
absence of $2.0 million in milestone payments received in 2010
under the terms of the Company's collaboration agreement with Merck
for the development and promotion of the OraQuick® rapid HCV
test.
The Company reported consolidated net income of $115,000, or
$0.00 per share, for the fourth quarter of 2011, compared to a net
loss of $1.0 million, or $0.02 per share, for the fourth quarter of
2010. The current quarter results include $813,000 of
intangible asset amortization and a $102,000 purchase accounting
inventory adjustment resulting from the DNAG acquisition.
The purchase accounting inventory adjustment is related to the
write up of DNAG's finished goods inventory to fair market value as
of the acquisition date. For the quarter and year ended December
31, 2011, this adjustment increased cost of products sold by
$102,000 and $852,000, respectively, based on the amount of the
acquired inventory sold during each period.
The Company reported a consolidated net loss of $8.8 million, or
$0.19 per share, for the year ended December 31, 2011, compared to
a net loss of $3.5 million, or $0.08 per share, for the year ended
December 31, 2010. The current year's consolidated loss
included $6.2 million of incremental costs associated with the
OraQuick® HIV OTC clinical trials, $2.6 million of transaction
costs associated with the acquisition of DNAG, $1.2 million in
amortization of acquired intangible assets and the $852,000
purchase accounting inventory adjustment described above.
Consolidated gross margin for the three months ended December
31, 2011 was 62% compared to 64% for the three months ended
December 31, 2010. Consolidated gross margin was 63% for the
years ended December 31, 2011 and 2010. The decrease in gross
margin in the current quarter was largely due to an unfavorable
change in product revenue mix. Gross margin remained
relatively flat for the full year 2011 as the negative impact of
the purchase accounting inventory adjustment discussed above was
offset by the benefits derived from lower direct labor costs,
improved absorption of overhead costs as a result of staffing
optimization, and the full implementation of automated
manufacturing during 2011.
Consolidated operating expenses increased to $14.9 million in
the fourth quarter of 2011 from $12.9 million in the comparable
period of 2010 and also increased to $61.1 million for the year
ended December 31, 2011, from $50.7 million for the year ended
December 31, 2010. These increases reflect the inclusion of DNAG
operating expenses, higher clinical trial spending related to the
Company's OraQuick® HIV OTC product and increased legal,
accounting, consulting and other transaction costs incurred by
OraSure in connection with the DNAG acquisition.
For the quarter and year ended December 31, 2011, the Company
also recorded an income tax benefit associated with the DNAG loss
before income taxes and certain Canadian research and development
and investment tax credits.
Cash, cash equivalents and short-term investments totaled $23.9
million and working capital was $30.9 million at December 31, 2011,
compared to $75.7 million and $77.8 million, respectively, at
December 31, 2010. The decrease in cash and working capital
was largely due to the use of $52.3 million in cash to fund the
DNAG acquisition and related transaction expenses.
First Quarter 2012 Outlook
The Company expects total consolidated revenues for the first
quarter of 2012 to range from $20.5 to $21.0 million and is
projecting a net loss of approximately $0.08 - $0.09 per share for
the first quarter of 2012.
Financial Data
|
Condensed Consolidated
Financial Data |
|
(In thousands, except
per-share data) |
|
|
|
Unaudited |
|
|
|
|
Three months
ended |
Year
ended |
|
December
31, |
December
31, |
|
2011 |
2010 |
2011 |
2010 |
Results of Operations |
|
|
|
|
Revenues |
$ 23,690 |
$ 18,817 |
$ 81,881 |
$ 75,015 |
Cost of products sold |
9,094 |
6,853 |
30,164 |
27,656 |
Gross profit |
14,596 |
11,964 |
51,717 |
47,359 |
Operating expenses: |
|
|
|
|
Research and development |
3,297 |
4,048 |
18,407 |
13,192 |
Sales and marketing |
6,357 |
4,830 |
22,383 |
20,727 |
General and administrative |
5,222 |
4,018 |
20,325 |
16,794 |
Total operating expenses |
14,876 |
12,896 |
61,115 |
50,713 |
Operating loss |
(280) |
(932) |
(9,398) |
(3,354) |
Other expense |
(158) |
(91) |
(312) |
(143) |
Loss before income taxes |
(438) |
(1,023) |
(9,710) |
(3,497) |
Income tax benefit |
(553) |
-- |
(869) |
-- |
Net income (loss) |
$ 115 |
$ (1,023) |
$ (8,841) |
$ (3,497) |
Earnings (loss) per share: |
|
|
|
|
Basic and Diluted |
$ -- |
$ (0.02) |
$ (0.19) |
$ (0.08) |
|
|
|
|
|
Weighted average shares: |
|
|
|
|
Basic |
47,264 |
46,221 |
46,908 |
46,187 |
Diluted |
48,893 |
46,221 |
46,908 |
46,187 |
|
|
|
|
|
|
Three Months
Ended December 31, |
|
Dollars |
|
Percentage of
Total Revenues |
Market |
2011 |
2010 |
% Change |
2011 |
2010 |
|
|
|
|
|
|
Infectious disease testing |
$ 11,592 |
$ 11,437 |
1% |
49% |
61% |
Substance abuse testing |
3,487 |
2,886 |
21 |
15 |
15 |
Cryosurgical systems |
3,139 |
2,844 |
10 |
13 |
15 |
Molecular collection systems |
4,194 |
-- |
100 |
17 |
-- |
Insurance risk assessment |
1,087 |
1,355 |
(20) |
5 |
7 |
Product revenues |
23,499 |
18,522 |
27 |
99 |
98 |
Licensing and product development |
191 |
295 |
(35) |
1 |
2 |
Total revenues |
$ 23,690 |
$ 18,817 |
26% |
100% |
100% |
|
|
|
|
|
|
|
Year Ended
December 31, |
|
Dollars |
|
Percentage of
Total Revenues |
Market |
2011 |
2010 |
% Change |
2011 |
2010 |
|
|
|
|
|
|
Infectious disease testing |
$ 44,691 |
$ 41,738 |
7% |
55% |
55% |
Substance abuse testing |
12,498 |
11,671 |
7 |
15 |
16 |
Cryosurgical systems |
12,046 |
11,965 |
1 |
15 |
16 |
Molecular collection systems |
6,216 |
-- |
100 |
8 |
-- |
Insurance risk assessment |
5,232 |
5,825 |
(10) |
6 |
8 |
Product revenues |
80,683 |
71,199 |
13 |
99 |
95 |
Licensing and product development |
1,198 |
3,816 |
(69) |
1 |
5 |
Total revenues |
$ 81,881 |
$ 75,015 |
9% |
100% |
100% |
|
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December
31, |
December
31, |
OraQuick®
Revenues |
2011 |
2010 |
% Change |
2011 |
2010 |
% Change |
|
|
|
|
|
|
|
Domestic HIV |
$ 9,775 |
$ 10,093 |
(3)% |
$38,722 |
$ 38,172 |
1% |
International HIV |
721 |
766 |
(6) |
3,011 |
1,800 |
67 |
Domestic HCV |
426 |
44 |
868 |
890 |
46 |
1,835 |
International HCV |
387 |
63 |
514 |
672 |
119 |
465 |
Total OraQuick® revenues |
$ 11,309 |
$ 10,966 |
3% |
$43,295 |
$ 40,137 |
8% |
|
|
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December
31, |
December
31, |
Intercept®
Revenues |
2011 |
2010 |
% Change |
2011 |
2010 |
% Change |
|
|
|
|
|
|
|
Domestic |
$ 2,096 |
$ 1,883 |
11% |
$ 8,004 |
$ 7,274 |
10% |
International |
439 |
454 |
(3) |
1,912 |
1,976 |
(3) |
Total Intercept® revenues |
$ 2,535 |
$ 2,337 |
8% |
$ 9,916 |
$ 9,250 |
7% |
|
|
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December
31, |
December
31, |
Cryosurgical Systems
Revenues |
2011 |
2010 |
% Change |
2011 |
2010 |
% Change |
|
|
|
|
|
|
|
Professional domestic |
$ 1,678 |
$ 1,492 |
12% |
$ 6,775 |
$ 5,967 |
14% |
Professional international |
412 |
520 |
(21) |
1,400 |
1,385 |
1 |
Over-the-Counter |
1,049 |
832 |
26 |
3,871 |
4,613 |
(16) |
Total cryosurgical systems revenues |
$ 3,139 |
$ 2,844 |
10% |
$ 12,046 |
$ 11,965 |
1% |
|
|
|
|
|
|
|
|
|
|
Consolidated Balance
Sheets (Unaudited) |
December 31,
2011 |
December 31,
2010 |
Assets |
|
|
Cash, cash equivalents and short-term
investments |
$ 23,878 |
$ 75,738 |
Accounts receivable, net |
17,159 |
12,471 |
Inventories |
9,621 |
7,346 |
Other current assets |
2,178 |
1,930 |
Property and equipment, net |
19,855 |
19,611 |
Intangible assets, net |
30,383 |
4,807 |
Goodwill |
24,740 |
-- |
Other non-current assets |
47 |
617 |
Total assets |
$ 127,861 |
$ 122,520 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Current portion of long-term debt |
$ 7,292 |
$ 7,791 |
Accounts payable |
4,142 |
2,899 |
Accrued expenses |
10,542 |
8,987 |
Deferred income taxes, net |
5,636 |
-- |
Stockholders' equity |
100,249 |
102,843 |
Total liabilities and stockholders'
equity |
$ 127,861 |
$ 122,520 |
|
|
|
|
Year
ended |
|
December
31, |
Additional Financial
Data (Unaudited) |
2011 |
2010 |
|
|
|
Capital expenditures |
$ 2,505 |
$ 2,106 |
Acquisition of DNA Genotek, Inc. (net of cash
acquired) |
$ 49,730 |
$ -- |
Depreciation and amortization |
$ 4,915 |
$ 3,012 |
Stock based compensation |
$ 4,101 |
$ 3,229 |
Cash provided by (used in) operating
activities |
$ (2,991) |
$ 3,887 |
Accounts receivable – days sales
outstanding |
68 days |
61 days |
|
|
|
Conference Call
The Company will host a conference call and audio webcast to
discuss the Company's 2011 fourth quarter and full-year financial
results, business developments and first quarter 2012 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 #44923763, 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
February 15, 2012, by dialing 855-859-2056 (Domestic) or
404-537-3406 (International) and entering the Conference ID
#44923763.
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. In
addition, through its wholly-owned subsidiary, DNA Genotek Inc.,
the Company also 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 OraSure Technologies,
please visit 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
integrate and realize the full benefits of the Company's
acquisition of DNA Genotek; ability to identify, complete,
integrate and realize the full benefits of future acquisitions;
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; adverse movements in foreign currency exchange rates;
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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