OraSure Technologies, Inc. (Nasdaq:OSUR), a market leader in oral
fluid diagnostics, today announced its consolidated financial
results for the full-year and fourth quarter of 2013.
Financial Highlights
- The Company reported record revenues for both the fourth
quarter and full-year 2013. Consolidated net revenues for the
fourth quarter were $28.8 million, a 30% increase from the
comparable quarter of 2012. Consolidated net revenues for the
full-year were $98.9 million, a 13% increase from the comparable
period of 2012. During the fourth quarter and full-year period, net
product revenues increased 31% and 15%, respectively, compared to
the year ago periods. These increases were primarily due to sales
of the Company's OraQuick® In-Home HIV test (which included a
non-recurring revenue adjustment described below) and higher
revenues from the Company's molecular collection systems
subsidiary, DNA Genotek ("DNAG").
- Gross sales of the Company's OraQuick® In-Home HIV test were
$4.3 million and $9.9 million for the fourth quarter and full-year
2013, respectively. These gross sales included a non-recurring
favorable $2.7 million adjustment made in December 2013 to account
for a change in the Company's revenue recognition policy related to
this product. The gross sales for the fourth quarter and
full-year of 2013 were reduced by customer allowances for
cooperative advertising, cash discounts and other allowances,
resulting in net revenues of $3.9 million and $9.1 million recorded
in each respective period. Gross and net sales of the
Company's OraQuick® In-Home test for the fourth quarter and
full-year 2012 were $902,000 and $546,000, respectively.
- Net revenues generated by DNAG during the fourth quarter of
2013 were $6.8 million, a 60% increase from the comparable period
in 2012. DNAG net revenues for the full-year 2013 were $20.4
million, a 43% increase from 2012. The increases in both
periods were primarily the result of higher sales to commercial
customers.
- Net revenues for the Company's OraQuick® rapid HCV test reached
$1.9 million for the fourth quarter and $5.1 million for the
full-year 2013, representing increases of 65% and 32%,
respectively, from the comparable 2012 periods. This growth
reflects increasing demand for the product in both the domestic and
international markets.
- Consolidated net income for the fourth quarter of 2013 was $6.2
million, or $0.11 per share, which compares to a net loss of $5.9
million, or $0.11 per share, for the fourth quarter of
2012. Consolidated net loss for the full-year 2013 was $11.2
million, or $0.20 per share, which compares to a net loss of $15.1
million, or $0.29 per share, for 2012. The results for the
fourth quarter and full-year 2013 included $4.6 million and $18.8
million in advertising and promotional expenses, respectively,
associated with the Company's OraQuick® In-Home HIV test. Also
included in the results for both periods was an $8.3 million
settlement payment received by the Company for the termination of
the Company's oral fluid assay collaboration agreement with Roche
Diagnostics.
"We are pleased with the Company's overall financial results and
especially the solid revenue growth delivered in 2013," said
Douglas A. Michels, President and CEO of OraSure
Technologies. "Our molecular collection systems business was
particularly strong, growing by more than 40% for the
year. Infectious disease revenues also increased largely due
to contributions from our newest products, the OraQuick® In-Home
HIV test and the OraQuick® rapid HCV test. The transition to a
new collaboration for the supply of high throughput homogeneous
drug assays represents another highlight from the year that should
enable growth in our substance abuse testing business."
Financial Results
Consolidated net product revenues for the fourth quarter and
full-year of 2013 increased 31% and 15%, respectively, from the
comparable periods of 2012. The fourth quarter increase was
primarily a result of higher sales of the Company's infectious
disease testing products, which included the non-recurring net
favorable $2.5 million accounting adjustment, and higher molecular
collection systems and cryosurgical systems product sales,
partially offset by lower sales of the Company's insurance risk
assessment products. The increase in net product revenues for the
full-year of 2013 was primarily the result of higher sales of the
Company's infectious disease testing products, including the $2.5
million net accounting adjustment, and higher sales of molecular
collections systems products, partially offset by lower sales of
the Company's substance abuse testing, cryosurgical systems and
insurance risk assessment products.
The Company had no consolidated licensing and product
development revenues for the fourth quarter of 2013 as a result of
the expiration of certain patents licensed to a third
party. This compares to $198,000 recorded for the fourth
quarter of 2012. Consolidated licensing and product
development revenues for the year ended December 31, 2013 decreased
to $623,000 from $2.1 million in the comparable period of the prior
year, primarily due to the absence of a $1.0 million milestone
payment received in the first quarter of 2012 under the Company's
HCV collaboration agreement with Merck. No similar payment was
received during 2013 because the collaboration agreement with Merck
was terminated in November 2012.
Consolidated gross margin for the three months and year ended
December 31, 2013 was 60% and 59%, respectively. Consolidated
gross margin for the three months and year ended December 31, 2012
was 60% and 63%, respectively. Gross margin for the current
year was negatively impacted by higher royalties, an unfavorable
change in product mix and the absence of the $1.0 million HCV
milestone payment, partially offset by an improvement in overhead
absorption.
Consolidated operating expenses decreased to $11.1 million
during the fourth quarter of 2013 compared to $19.4 million in the
comparable period of 2012. For the year ended December 31, 2013,
consolidated operating expenses were $70.8 million, a decrease from
the $71.8 million reported for the year ended December 31,
2012. The decrease for the fourth quarter of 2013 was
primarily due to the inclusion of the $8.3 million Roche settlement
payment partially offset by higher promotional and advertising
expenses associated with the Company's OraQuick® In-Home HIV
test. The current quarter and full-year period expenses
included $4.6 million and $18.8 million of promotional and
advertising costs related to this product, compared to $5.2 million
and $9.9 million spent in the fourth quarter and full-year of 2012,
respectively.
For the three months ended December 31, 2013, the Company
recorded Canadian income tax expense of $14,000. For the year
ended December 31, 2013, the Company recorded a Canadian income tax
benefit of $772,000 associated with the loss before income taxes
and certain Canadian research and development and investment tax
credits at DNAG.
The Company's cash balance totaled $93.2 million at December 31,
2013 compared to $87.9 million at December 31, 2012. Working
capital was $100.6 million at December 31, 2013 compared to $103.5
million at December 31, 2012. For the year ended December 31,
2013, the Company generated $8.3 million from operations, which
included the $8.3 million settlement payment from Roche. Cash
generated by operations in the fourth quarter of 2013 was $11.4
million which also included the $8.3 million Roche payment.
First Quarter 2014 Outlook
The Company expects consolidated net revenues to range from
$23.0 to $23.5 million and is projecting a consolidated net loss of
approximately $0.13 - $0.14 per share for the first quarter of
2014.
Financial Data
Condensed Consolidated
Financial Data |
(In thousands, except
per-share data) |
|
|
|
|
|
Unaudited |
|
|
|
|
Three months
ended |
Year
ended |
|
December
31, |
December
31, |
|
2013 |
2012 |
2013 |
2012 |
Results of Operations |
|
|
|
|
Net revenues (1) |
$ 28,768 |
$ 22,144 |
$ 98,940 |
$ 87,820 |
Cost of products sold |
11,640 |
8,893 |
40,351 |
32,249 |
Gross profit |
17,128 |
13,251 |
58,589 |
55,571 |
Operating expenses: |
|
|
|
|
Research and development |
2,212 |
2,893 |
10,932 |
12,445 |
Sales and marketing |
11,241 |
11,597 |
46,465 |
37,087 |
General and administrative |
5,912 |
4,911 |
21,654 |
22,309 |
Gain on contract termination
settlement |
(8,300) |
-- |
(8,300) |
-- |
Total operating expenses |
11,065 |
19,401 |
70,751 |
71,841 |
Operating income (loss) |
6,063 |
(6,150) |
(12,162) |
(16,270) |
Other income (expense) |
164 |
25 |
200 |
(242) |
Income (loss) before income taxes |
6,227 |
(6,125) |
(11,962) |
(16,512) |
Income tax expense (benefit) |
14 |
(259) |
(772) |
(1,397) |
Net income (loss) |
$ 6,213 |
$ (5,866) |
$ (11,190) |
$ (15,115) |
Earnings (loss) per share: |
|
|
|
|
Basic and Diluted |
$ 0.11 |
$ (0.11) |
$ (0.20) |
$ (0.29) |
|
|
|
|
|
Weighted average shares: |
|
|
|
|
Basic |
55,616 |
55,224 |
55,555 |
51,457 |
Diluted |
56,176 |
55,224 |
55,555 |
51,457 |
|
|
|
|
|
(1) The three months and
year ended December 31, 2013 net revenues include a non-recurring
net favorable $2.5 million adjustment to account for a change in
the Company's revenue recognition policy related to its OraQuick®
In-Home HIV tests. |
Summary of Revenues by Market and Product
(Unaudited)
|
Three Months
Ended December 31, |
|
Dollars |
|
Percentage of
Total Net Revenues |
Market |
2013 |
2012 |
% Change |
2013 |
2012 |
|
|
|
|
|
|
Infectious disease testing |
$ 15,436 |
$ 11,846 |
30% |
54% |
54% |
Substance abuse testing |
2,116 |
2,101 |
1 |
7 |
9 |
Cryosurgical systems |
3,558 |
2,696 |
32 |
12 |
12 |
Molecular collection systems |
6,831 |
4,266 |
60 |
24 |
19 |
Insurance risk assessment |
827 |
1,037 |
(20) |
3 |
5 |
Net product revenues |
28,768 |
21,946 |
31 |
100 |
99 |
Licensing and product development |
-- |
198 |
(100) |
-- |
1 |
Net revenues |
$ 28,768 |
$ 22,144 |
30% |
100% |
100% |
|
|
|
Year Ended
December 31, |
|
Dollars |
|
Percentage of
Total Net Revenues |
Market |
2013 |
2012 |
% Change |
2013 |
2012 |
|
|
|
|
|
|
Infectious disease testing |
$ 50,961 |
$ 42,728 |
19% |
51% |
49% |
Substance abuse testing |
8,571 |
9,407 |
(9) |
9 |
11 |
Cryosurgical systems |
14,468 |
14,876 |
(3) |
14 |
17 |
Molecular collection systems |
20,381 |
14,258 |
43 |
21 |
16 |
Insurance risk assessment |
3,936 |
4,484 |
(12) |
4 |
5 |
Net product revenues |
98,317 |
85,753 |
15 |
99 |
98 |
Licensing and product development |
623 |
2,067 |
(70) |
1 |
2 |
Net revenues |
$ 98,940 |
$ 87,820 |
13% |
100% |
100% |
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December
31, |
December
31, |
OraQuick® Revenues |
2013 |
2012 |
% Change |
2013 |
2012 |
% Change |
|
|
|
|
|
|
|
Domestic HIV |
$ 8,447 |
$ 9,157 |
(8)% |
$32,301 |
$ 34,265 |
(6)% |
International HIV |
907 |
773 |
17 |
3,365 |
3,061 |
10 |
Domestic HIV OTC |
3,909 |
546 |
616 |
9,106 |
546 |
1,568 |
Net HIV revenues |
13,263 |
10,476 |
27 |
44,772 |
37,872 |
18 |
|
|
|
|
|
|
|
Domestic HCV |
1,073 |
847 |
27 |
2,847 |
2,805 |
1 |
International HCV |
860 |
326 |
164 |
2,268 |
1,059 |
114 |
Net HCV revenues |
1,933 |
1,173 |
65 |
5,115 |
3,864 |
32 |
|
|
|
|
|
|
|
Net OraQuick® revenues |
$ 15,196 |
$ 11,649 |
30% |
$49,887 |
$ 41,736 |
20% |
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December
31, |
December
31, |
Intercept® Revenues |
2013 |
2012 |
% Change |
2013 |
2012 |
% Change |
|
|
|
|
|
|
|
Domestic |
$ 1,453 |
$ 1,354 |
7% |
$ 5,693 |
$ 6,335 |
(10)% |
International |
115 |
90 |
28 |
500 |
706 |
(29) |
Net Intercept® revenues |
$ 1,568 |
$ 1,444 |
9% |
$ 6,193 |
$ 7,041 |
(12)% |
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December
31, |
December
31, |
Cryosurgical Systems
Revenues |
2013 |
2012 |
% Change |
2013 |
2012 |
% Change |
|
|
|
|
|
|
|
Domestic professional |
$ 1,828 |
$ 1,818 |
1% |
$ 6,020 |
$ 7,159 |
(16)% |
International professional |
402 |
352 |
14 |
1,441 |
1,462 |
(1) |
International over-the-counter |
1,328 |
526 |
152 |
7,007 |
6,255 |
12 |
Net cryosurgical systems
revenues |
$ 3,558 |
$ 2,696 |
32% |
$ 14,468 |
$ 14,876 |
(3)% |
|
Condensed Consolidated
Balance Sheets (Unaudited) |
|
|
|
|
December 31,
2013 |
December 31,
2012 |
Assets |
|
|
|
$ 93,191 |
$ 87,888 |
Cash |
Accounts receivable, net |
12,957 |
17,469 |
Inventories |
11,444 |
12,758 |
Other current assets |
1,983 |
2,002 |
Property and equipment, net |
17,933 |
18,546 |
Intangible assets, net |
22,226 |
27,207 |
Goodwill |
23,782 |
25,445 |
Other non-current assets |
729 |
124 |
Total assets |
$ 184,245 |
$ 191,439 |
|
|
|
Liabilities and Stockholders' Equity |
|
|
Accounts payable |
$ 4,834 |
$ 3,380 |
Deferred revenue |
1,119 |
5,504 |
Accrued expenses |
13,032 |
7,750 |
Other non-current liabilities |
677 |
89 |
Deferred income taxes |
3,437 |
4,401 |
Stockholders' equity |
161,146 |
170,315 |
Total liabilities and
stockholders' equity |
$ 184,245 |
$ 191,439 |
|
|
|
Year
ended |
|
December
31, |
Additional Financial
Data (Unaudited) |
2013 |
2012 |
|
|
|
Capital expenditures |
$ 2,462 |
$ 2,019 |
Net proceeds from public offering |
$ -- |
$ 70,246 |
Depreciation and amortization |
$ 6,492 |
$ 7,250 |
Stock based compensation |
$ 5,572 |
$ 5,197 |
Cash provided by (used in) operating
activities |
$ 8,286 |
$ (5,373) |
Conference Call
The Company will host a conference call and audio webcast to
discuss the Company's 2013 fourth quarter and full-year financial
results, certain business developments and financial guidance for
the first 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 #37105448 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 February 12, 2014, by
dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and
entering the Conference ID #37105448.
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 483 observations,
warning letters 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, 2012, 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: Company Contact:
Ronald H. Spair
Chief Financial Officer
610-882-1820
Investorinfo@orasure.com
www.orasure.com
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