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 ended December 31,
2014.
Financial Highlights
- The Company exceeded $100 million in annual revenues for the
first time in its history. Consolidated net revenues for the year
ended December 31, 2014 were $106.5 million, an 8% increase from
the comparable period of 2013.
- Consolidated net revenues for the fourth quarter of 2014 were
$28.7 million, which approximated the level of revenues reported in
the fourth quarter of 2013.
- Licensing and product development revenues were $3.4 million
and $7.6 million for the quarter and year ended December 31, 2014,
respectively, and represent the recognition of payments under the
Company's' HCV collaboration with AbbVie.
- Net revenues generated by the Company's molecular collection
systems subsidiary, DNA Genotek ("DNAG"), were $6.3 million and
$23.8 million for the fourth quarter and full-year of 2014,
respectively, representing an 8% decrease and a 17% increase over
the fourth quarter and full-year of 2013, respectively. DNAG
accounted for 22% of the Company's aggregate 2014 consolidated net
revenues.
- Net revenues for the Company's OraQuick® rapid HCV test were
$1.7 million and $7.3 million for the fourth quarter and full-year
of 2014, respectively, representing a 10% decrease and a 42%
increase over the fourth quarter and full-year of 2013,
respectively.
- Consolidated net loss for the fourth quarter of 2014 was $2.7
million, or $0.05 per share, which compares to net income of $6.2
million, or $0.11 per share, for the fourth quarter of 2013. This
change in the current quarter bottom line performance was primarily
the result of the absence of an $8.3 million contract termination
payment received in the prior year period. Consolidated net loss
for the year ended December 31, 2014 was $4.6 million, or $0.08 per
share, which compares to a net loss of $11.2 million, or $0.20 per
share, for the comparable period of 2013.
- Cash and short term investments totaled $97.9 million and
working capital amounted to $104.8 million at December 31,
2014.
"Crossing the $100 million threshold in annual revenues has been
a long-term goal and is a significant milestone for our Company,"
said Douglas A. Michels, President and CEO of OraSure Technologies.
"The molecular collection systems segment continues to deliver
strong results and our HCV business continues to grow. Our
immediate focus is on increasing usage of our OraQuick® HCV test
under our HCV collaboration with AbbVie, continuing the strong
performance at DNA Genotek, and pursuing a potential rapid Ebola
test, including securing development funding and purchase
commitments for this proposed new product."
Financial Results
Consolidated net product revenues for the fourth quarter of 2014
decreased 12% from the comparable period of 2013, primarily as a
result of the change in revenue recognition policy related to the
Company's OraQuick® In-Home HIV test which increased fourth quarter
2013 net revenues by $2.5 million. Consolidated net product
revenues for the year ended December 31, 2014 increased 1% over the
prior year period, primarily as a result of higher sales of the
Company's molecular collection systems, OraQuick® HCV and
cryosurgical systems products. These increases were partially
offset by lower sales of the OraQuick® professional HIV product
line and OraQuick® In-Home HIV test. OraQuick® HIV In-Home revenues
in 2013 included the $2.5 million non-recurring favorable
adjustment resulting from the accounting policy change.
Consolidated licensing and product development revenues for the
fourth quarter and full-year of 2014 were $3.4 million and $7.6
million, respectively. Consolidated licensing and product
development revenues for the fourth quarter and full-year of 2013
were $0 and $623,000, respectively. Licensing and product
development revenues in 2014 represent the recognition of
exclusivity payments under the Company's HCV collaboration
agreement with AbbVie. Licensing and product development revenues
in 2013 represent royalties paid on domestic outsales of a
licensee's OTC cryosurgical wart removal product, pursuant to a
license agreement that expired in that same year.
Consolidated gross margin for both the three months and year
ended December 31, 2014 was 63%. Consolidated gross margin for the
three months and year ended December 31, 2013 was 60% and 59%,
respectively. Gross margin for the current quarter improved largely
as a result of the increased licensing and product development
revenues and a more favorable product mix resulting from higher
margin DNAG sales, partially offset by a decline in overhead
absorption as a result of facility equipment replacements. Gross
margin for the full-year 2014 also improved largely due to the
increased licensing and product development revenues and higher
margin DNAG sales.
Consolidated operating expenses increased to $20.5 million
during the fourth quarter of 2014 compared to $11.1 million in the
comparable period of 2013. This increase was primarily due to the
absence of an $8.3 million contract termination payment from Roche
Diagnostics which was received in the fourth quarter of 2013. This
payment, coupled with lower promotional expenses associated with
the Company's OraQuick® In-Home HIV test, were partially offset by
increased expenses incurred under the HCV collaboration with AbbVie
, higher research and development costs and higher staffing
expenses. Promotional expenses for the OraQuick® In-Home HIV test
were $614,000 and $4.6 million for the fourth quarters of 2014 and
2013, respectively.
For the year ended December 31, 2014, consolidated operating
expenses increased to $71.4 million from the $70.8 million reported
for the prior year. This increase was primarily due to a $2.8
million reduction in contract termination payments received from
Roche Diagnostics during 2014, increased expenses incurred under
the HCV collaboration with AbbVie, higher research and development
costs, and higher legal, staffing and consulting costs, partially
offset by lower promotional expenses associated with the Company's
OraQuick® In-Home HIV test. Full-year promotional expenses for the
OraQuick® In-Home HIV test were $8.5 million and $18.8 million for
2014 and 2013, respectively.
For the three months and year ended December 31, 2014, the
Company recorded Canadian income tax expense of $376,000 and
$343,000, respectively. For the three months and year ended
December 31, 2013, the Company recorded Canadian income tax expense
of $14,000 and a Canadian income tax benefit of $772,000
respectively. The 2013 full-year tax benefit was the result of
certain Canadian research and development and investment tax
credits and DNAG's loss before income taxes in that period.
The Company's cash and short-term investment balance totaled
$97.9 million at December 31, 2014 compared to $93.2 million in
cash at December 31, 2013. Working capital was $104.8 million
at December 31, 2014 compared to $100.6 million at December 31,
2013. For the year ended December 31, 2014, the Company's
consolidated operations generated $7.5 million of cash.
First Quarter 2015 Outlook
The Company expects consolidated net revenues to range from
$26.5 to $27.0 million and is projecting a consolidated net loss of
approximately $0.01 to $0.02 per share for the first quarter of
2015.
Financial Data
Condensed Consolidated
Financial Data |
(In thousands, except
per-share data) |
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
Three months
ended |
Year
ended |
|
December 31, |
December 31, |
|
2014 |
2013 |
2014 |
2013 |
Results of Operations |
|
|
|
|
Net revenues1 |
$ 28,681 |
$ 28,768 |
$ 106,464 |
$ 98,940 |
Cost of products sold |
10,704 |
11,640 |
39,840 |
40,351 |
Gross profit |
17,977 |
17,128 |
66,624 |
58,589 |
Operating expenses: |
|
|
|
|
Research and development |
3,817 |
2,212 |
12,058 |
10,932 |
Sales and marketing |
10,290 |
11,241 |
41,118 |
46,465 |
General and administrative |
6,433 |
5,912 |
23,750 |
21,654 |
Gain on contract termination
settlement |
-- |
(8,300) |
(5,500) |
(8,300) |
Total operating expenses |
20,540 |
11,065 |
71,426 |
70,751 |
Operating income (loss) |
(2,563) |
6,063 |
(4,802) |
(12,162) |
Other income (expense) |
287 |
164 |
531 |
200 |
Income (loss) before income taxes |
(2,276) |
6,227 |
(4,271) |
(11,962) |
Income tax expense (benefit) |
376 |
14 |
343 |
(772) |
Net income (loss) |
$ (2,652) |
$ 6,213 |
$ (4,614) |
$ (11,190) |
Earnings (loss) per share: |
|
|
|
|
Basic and Diluted |
$ (0.05) |
$ 0.11 |
$ (0.08) |
$ (0.20) |
|
|
|
|
|
Weighted average shares: |
|
|
|
|
Basic |
56,105 |
55,616 |
55,949 |
55,555 |
Diluted |
56,105 |
56,176 |
55,949 |
55,555 |
_________________ |
1Net revenues for the three months and year
ended December 31, 2013 include a non-recurring net favorable $2.5
million adjustment to reflect a change in the Company's revenue
recognition policy related to its OraQuick® In-Home HIV test. |
Summary of Net Revenues by Market and Product
(Unaudited)
|
Three
Months Ended December 31, |
|
|
|
Percentage
of |
|
|
|
Total Net |
|
Dollars |
|
Revenues |
|
|
|
% |
|
|
Market |
2014 |
2013 |
Change |
2014 |
2013 |
|
|
|
|
|
|
Infectious disease testing |
$ 12,602 |
$ 15,436 |
(18)% |
44% |
54% |
Substance abuse testing |
2,250 |
2,116 |
6 |
8 |
7 |
Cryosurgical systems |
3,377 |
3,558 |
(5) |
11 |
12 |
Molecular collection systems |
6,255 |
6,831 |
(8) |
22 |
24 |
Insurance risk assessment |
800 |
827 |
(3) |
3 |
3 |
Net product revenues |
25,284 |
28,768 |
(12) |
88 |
100 |
Licensing and product development |
3,397 |
-- |
NM* |
12 |
-- |
Net revenues |
$ 28,681 |
$ 28,768 |
(0)% |
100% |
100% |
|
|
|
|
|
|
|
Year
Ended December 31, |
|
|
|
Percentage
of |
|
|
|
Total Net |
|
Dollars |
|
Revenues |
|
|
|
% |
|
|
Market |
2014 |
2013 |
Change |
2014 |
2013 |
|
|
|
|
|
|
Infectious disease testing |
$ 47,515 |
$ 50,961 |
(7)% |
45% |
51% |
Substance abuse testing |
8,437 |
8,571 |
(2) |
8 |
9 |
Cryosurgical systems |
15,505 |
14,468 |
7 |
15 |
14 |
Molecular collection systems |
23,778 |
20,381 |
17 |
22 |
21 |
Insurance risk assessment |
3,659 |
3,936 |
(7) |
3 |
4 |
Net product revenues |
98,894 |
98,317 |
1 |
93 |
99 |
Licensing and product development |
7,570 |
623 |
NM* |
7 |
1 |
Net revenues |
$ 106,464 |
$ 98,940 |
8% |
100% |
100% |
|
|
|
|
|
|
* Calculation is not considered
meaningful |
|
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December 31, |
December 31, |
|
|
|
% |
|
|
% |
OraQuick® Revenues |
2014 |
2013 |
Change |
2014 |
2013 |
Change |
|
|
|
|
|
|
|
Domestic HIV |
$ 8,363 |
$ 8,447 |
(1)% |
$ 29,933 |
$ 32,301 |
(7)% |
International HIV |
587 |
907 |
(35) |
2,483 |
3,365 |
(26) |
Domestic HIV OTC1 |
1,502 |
3,909 |
(62) |
6,493 |
9,106 |
(29) |
Net HIV revenues |
10,452 |
13,263 |
(21) |
38,909 |
44,772 |
(13) |
|
|
|
|
|
|
|
Domestic HCV |
1,036 |
1,073 |
(3) |
4,220 |
2,847 |
48 |
International HCV |
707 |
860 |
(18) |
3,048 |
2,268 |
34 |
Net HCV revenues |
1,743 |
1,933 |
(10) |
7,268 |
5,115 |
42 |
|
|
|
|
|
|
|
Net OraQuick® revenues |
$ 12,195 |
$ 15,196 |
(20)% |
$ 46,177 |
$ 49,887 |
(7)% |
|
|
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December 31, |
December 31, |
|
|
|
% |
|
|
% |
Intercept® Revenues |
2014 |
2013 |
Change |
2014 |
2013 |
Change |
|
|
|
|
|
|
|
Domestic |
$ 1,629 |
$ 1,453 |
12% |
$ 6,101 |
$ 5,693 |
7% |
International |
73 |
115 |
(37) |
149 |
500 |
(70) |
Net Intercept® revenues |
$ 1,702 |
$ 1,568 |
9% |
$ 6,250 |
$ 6,193 |
1% |
|
|
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December 31, |
December 31, |
|
|
|
% |
|
|
% |
Cryosurgical Systems
Revenues |
2014 |
2013 |
Change |
2014 |
2013 |
Change |
|
|
|
|
|
|
|
Domestic professional |
$ 2,149 |
$ 1,828 |
18% |
$ 6,750 |
$ 6,020 |
12% |
International professional |
111 |
402 |
(72) |
693 |
1,441 |
(52) |
Domestic over-the-counter |
108 |
-- |
100 |
108 |
-- |
100 |
International over-the-counter |
1,009 |
1,328 |
(24) |
7,954 |
7,007 |
14 |
Net cryosurgical systems
revenues |
$ 3,377 |
$ 3,558 |
(5)% |
$ 15,505 |
$ 14,468 |
7% |
_________________ |
1Net revenues for the three months and year
ended December 31, 2013 include a non-recurring net favorable $2.5
million adjustment to reflect a change in the Company's revenue
recognition policy related to its OraQuick® In-Home HIV test. |
Condensed Consolidated
Balance Sheets (Unaudited) |
|
|
December 31,
2014 |
December 31,
2013 |
Assets |
|
|
Cash |
$ 92,867 |
$ 93,191 |
Short-term investments |
5,000 |
-- |
Accounts receivable, net |
16,138 |
12,957 |
Inventories |
15,763 |
11,444 |
Other current assets |
1,446 |
1,983 |
Property and equipment, net |
17,934 |
17,933 |
Intangible assets, net |
17,505 |
22,226 |
Goodwill |
21,734 |
23,782 |
Other non-current assets |
1,246 |
729 |
Total assets |
$ 189,633 |
$ 184,245 |
|
|
|
Liabilities and Stockholders' Equity |
|
|
Accounts payable |
$ 7,148 |
$ 4,834 |
Deferred revenue |
8,043 |
1,119 |
Accrued expenses |
11,271 |
13,032 |
Other non-current liabilities |
1,234 |
677 |
Deferred income taxes |
3,236 |
3,437 |
Stockholders' equity |
158,701 |
161,146 |
Total liabilities and
stockholders' equity |
$ 189,633 |
$ 184,245 |
|
|
|
|
|
|
|
Year
ended |
|
December 31, |
Additional Financial
Data (Unaudited) |
2014 |
2013 |
|
|
|
Capital expenditures |
$ 3,005 |
$ 2,462 |
Depreciation and amortization |
$ 6,307 |
$ 6,552 |
Stock based compensation |
$ 5,744 |
$ 5,572 |
Cash provided by operating activities |
$ 7,526 |
$ 8,385 |
|
|
|
Conference Call
The Company will host a conference call and audio webcast to
discuss the Company's 2014 full-year and fourth quarter financial
results, certain business developments and financial guidance for
the first quarter of 2015, 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
844-831-3030 (Domestic) or 315-625-6887 (International) and
reference Conference ID #63824420 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 11, 2015, by
dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and
entering the Conference ID #63824420.
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; our ability to achieve financial and performance
objectives under the HCV collaboration with AbbVie; failure of
distributors or other customers to meet purchase forecasts,
historic purchase levels or minimum purchase requirements for our
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, including changes in CDC or other testing guidelines,
algorithms or other recommendations; 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 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 OraSure'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 attract
and 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: Company Contact:
Ronald H. Spair
Chief Financial Officer
610-882-1820
Investorinfo@orasure.com
www.orasure.com
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