OraSure Technologies, Inc. (NASDAQ: OSUR), a leader in
point-of-care and home diagnostic tests, specimen collection
devices, and microbiome laboratory and analytical services, today
announced its financial results for the three months ended
September 30, 2022.
“This quarter we made significant progress on
our transformation journey. We began to establish the foundations
of our future strategy and position the Company for resetting our
financial base which is designed to achieve our long-term financial
success. We believe we hold a unique position in healthcare as we
power the industry with effortless point-of-care diagnostic
testing, sample collection, multi-ome services, and innovation. By
doing this, we connect healthcare to people and help increase
access, affordability, and quality of care,” said OraSure President
and CEO Carrie Eglinton Manner.
She continued, “We generated positive cash flow
this quarter ahead of our previous guidance which is an important
milestone as we look to rebuild our balance sheet through our
anticipated significant sales of InteliSwab® tests in coming
quarters. To that end, we have recently won additional contracts
and expanded retail presence with availability on Amazon.com that
will extend our forward visibility for the product. We are
strengthening our foundation driving further efficiencies in our
core business, which will support future growth investments to
bolster our long-term core growth outlook.”
Financial Highlights
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Diagnostics |
$ |
18,092 |
|
|
$ |
15,836 |
|
|
14 |
|
% |
|
$ |
51,607 |
|
|
$ |
49,430 |
|
|
4 |
|
% |
InteliSwab |
|
79,559 |
|
|
|
7,675 |
|
|
937 |
|
|
|
|
144,809 |
|
|
|
7,938 |
|
|
NM |
|
|
Total Diagnostics |
|
97,651 |
|
|
|
23,511 |
|
|
315 |
|
|
|
|
196,416 |
|
|
|
57,368 |
|
|
242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Molecular Solutions |
|
18,451 |
|
|
|
24,151 |
|
|
(24 |
) |
|
|
|
58,463 |
|
|
|
66,529 |
|
|
(12 |
) |
|
COVID-19 kits |
|
361 |
|
|
|
6,255 |
|
|
(94 |
) |
|
|
|
9,522 |
|
|
|
46,209 |
|
|
(79 |
) |
|
Total Molecular Solutions |
|
18,812 |
|
|
|
30,406 |
|
|
(38 |
) |
% |
|
|
67,985 |
|
|
|
112,738 |
|
|
(40 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue |
$ |
116,463 |
|
|
$ |
53,917 |
|
|
116 |
|
% |
|
$ |
264,401 |
|
|
$ |
170,106 |
|
|
55 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
116,463 |
|
|
$ |
53,917 |
|
|
116 |
|
% |
|
$ |
264,401 |
|
|
$ |
170,106 |
|
|
55 |
|
% |
Gross profit |
|
46,192 |
|
|
|
21,468 |
|
|
115 |
|
|
|
|
98,048 |
|
|
|
90,467 |
|
|
8 |
|
|
Gross margin |
|
40 |
% |
|
|
40 |
% |
|
|
|
|
|
|
37 |
% |
|
|
53 |
% |
|
|
|
|
Non-GAAP gross profit |
|
46,629 |
|
|
|
23,626 |
|
|
97 |
|
|
|
|
104,338 |
|
|
|
93,023 |
|
|
12 |
|
|
Non-GAAP gross margin |
|
40 |
% |
|
|
44 |
% |
|
|
|
|
|
|
39 |
% |
|
|
55 |
% |
|
|
|
|
Operating income (loss) |
|
875 |
|
|
|
(13,013 |
) |
|
NM |
|
|
|
|
(36,392 |
) |
|
|
(793 |
) |
|
NM |
|
|
Operating margin |
|
1 |
% |
|
|
-24 |
% |
|
|
|
|
|
|
-14 |
% |
|
|
0 |
% |
|
|
|
|
Non-GAAP operating income (loss) |
|
11,372 |
|
|
|
(8,831 |
) |
|
NM |
|
|
|
|
3,386 |
|
|
|
6,724 |
|
|
(50 |
) |
|
Non-GAAP operating income (loss) |
|
10 |
% |
|
|
-16 |
% |
|
|
|
|
|
|
1 |
% |
|
|
4 |
% |
|
|
|
|
Net income (loss) |
|
5,273 |
|
|
|
(15,015 |
) |
|
NM |
|
|
|
|
(33,496 |
) |
|
|
(12,605 |
) |
|
166 |
|
|
Non-GAAP net income (loss) |
|
9,678 |
|
|
|
(11,044 |
) |
|
NM |
|
|
|
|
(1,056 |
) |
|
|
(5,357 |
) |
|
(80 |
) |
|
GAAP EPS |
|
0.07 |
|
|
|
(0.21 |
) |
|
NM |
|
|
|
|
(0.46 |
) |
|
|
(0.18 |
) |
|
164 |
|
|
Non-GAAP EPS |
$ |
0.13 |
|
|
$ |
(0.15 |
) |
|
NM |
|
% |
|
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
(80 |
) |
% |
NM – not meaningful
- Net revenues for the third quarter
of 2022 were $116.5 million, a 116% increase from the third
quarter of 2021 and a new record for the Company.
- Total InteliSwab® test revenue of
$79.6 million increased 85% sequentially as the company scaled its
production capacity and saw increased order volume supporting the
Federal government’s school testing program.
- Core diagnostic revenue increased
14% versus the prior year primarily due to the contribution from
non-product revenue strength which complements domestic HIV sales
and international HCV sales. Core Molecular Solutions revenue
decreased 24% year-over-year predominantly due to lower order
volumes at more consumer-oriented accounts.
- GAAP gross margin percentage was
40% in the quarter compared to 40% in the third quarter of 2021.
Gross margins were negatively impacted by product mix on a
year-over-year basis but positively impacted by significant
efficiencies achieved with the Company’s InteliSwab® test
production. Non-GAAP gross margins in the quarter were 40% and flat
on a sequential basis as product mix headwinds offset continued
efficiency and scale benefits achieved with InteliSwab® tests and
the benefit of higher non-product revenue in the quarter.
- GAAP operating income in the third
quarter was $0.9 million which compares to a ($13.0) million
operating loss in the third quarter of 2021. Non-GAAP operating
income was $11.4 million in the quarter, increased by $12.7 million
on a sequential basis.
- Cash flow from operations in the
quarter was $16.3 million in the third quarter compared to ($19.1)
million used in the third quarter of 2021. OraSure generated
positive cash flow from operations ahead of previously stated
guidance which called for the Company to achieve positive cash flow
from operations in the fourth quarter of 2022. The Company ended
the quarter with total cash and cash equivalents balance of $101.6
million, a $5.8 million increase from $95.8 million on a sequential
basis.
Recent Business Highlights
- The Company announced that its
InteliSwab® test has been accepted to be sold by Amazon and
fulfilled with eligibility for Prime free shipping.
- Announced InteliSwab® tests will be
offered by a new retail distribution partnership the potential for
up to 400 stores nationwide.
- Received U.S. FDA clearance for its
ORAcollect•Dx saliva collection device for OTC (i.e.
direct-to-consumer) use. OraSure received this designation through
its partnership with Grifols to support screening for
alpha1-antitrypsin deficiency (alpha-1) in individuals who may be
at risk for alpha-1. Alpha-1 raises patients’ risks for lung
disorders and it is estimated that about 3% of COPD patients have
alpha-1. Beginning in Q2 2023, Grifols will offer free AlphaID™ At
Home Genetic Health Risk Service, supporting alpha-1 screening,
that utilize the ORAcollect®•Dx device to help identify individuals
at risk.
- Announced a new partnership with
Mars Petcare to create the world’s largest biobank around
microbiome data for cats and dogs. Samples collected as part of the
biobank study will be analyzed and Diversigen will sequence the DNA
of the microorganisms in the sample. Mars Petcare scientists will
then use the data to generate insights about what cat and dog
microbiomes look like over time, including on health and
disease.
- The first microbiome based
therapeutic received the FDA’s Vaccines and Related Biological
Products Advisory Committee approval. The Company sees this as a
signal of positive catalyst for investment in the microbiome
testing services industry.
- The Biomedical Advanced Research
and Development Authority (BARDA) has awarded the Company an $8.6
million contract to develop a 2nd generation Ebola test on the
OraQuick® testing platform. The goal is for the 2nd generation
test to have improved sensitivity, increased shelf life, new
chemistry and more automation when compared to its de novo U.S.
Food and Drug Administration (FDA) 510(k) authorized test.
- OraSure was selected to provide its
OraQuick® In-Home HIV tests in support of the Centers for
Disease Control and Preventions (CDC) “Together Take Me Home,” HIV
self-test program. Under the program, the CDC will provide $41.5
million in total over a five-year period to support community
testing with a portion going to test procurement. Emory University
will manage the program overall and closely collaborate with a
number of partner organizations, including OraSure, to supply tests
to vulnerable communities who may not be equitably reached by other
existing HIV testing services across the United States.
- Launched the new OMNIgene® GUT
RNA/DNA collection kits. This Research Use Only product, based on
the OMNIgene® Gut DNA kit, incorporates a newly developed &
validated reagent to stabilize microbial DNA and RNA from human
fecal samples.
Financial Guidance
The Company is guiding toward 4Q22 revenue of
$95 to $100 million representing 49% to 57% growth relative to the
fourth quarter of last year. The Company is also guiding to
continued positive cash flow from operations in the fourth
quarter.
Financial Data (Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Results of Operations |
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
116,463 |
|
|
$ |
53,917 |
|
|
$ |
264,401 |
|
|
$ |
170,106 |
|
Cost of products and services sold |
|
|
70,271 |
|
|
|
32,449 |
|
|
|
166,353 |
|
|
|
79,639 |
|
Gross profit |
|
|
46,192 |
|
|
|
21,468 |
|
|
|
98,048 |
|
|
|
90,467 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
9,757 |
|
|
|
8,596 |
|
|
|
27,238 |
|
|
|
25,270 |
|
Sales and marketing |
|
|
13,474 |
|
|
|
13,886 |
|
|
|
37,875 |
|
|
|
33,836 |
|
General and administrative |
|
|
15,527 |
|
|
|
12,499 |
|
|
|
52,262 |
|
|
|
33,680 |
|
Loss on impairment |
|
|
6,559 |
|
|
|
— |
|
|
|
17,101 |
|
|
|
— |
|
Change in fair value of acquisition-related contingent
consideration |
|
|
— |
|
|
|
(500 |
) |
|
|
(36 |
) |
|
|
(1,526 |
) |
Total operating expenses |
|
|
45,317 |
|
|
|
34,481 |
|
|
|
134,440 |
|
|
|
91,260 |
|
Operating income (loss) |
|
|
875 |
|
|
|
(13,013 |
) |
|
|
(36,392 |
) |
|
|
(793 |
) |
Other income |
|
|
3,255 |
|
|
|
100 |
|
|
|
4,520 |
|
|
|
429 |
|
Income (loss) before income taxes |
|
|
4,130 |
|
|
|
(12,913 |
) |
|
|
(31,872 |
) |
|
|
(364 |
) |
Income tax expense (benefit) |
|
|
(1,143 |
) |
|
|
2,102 |
|
|
|
1,624 |
|
|
|
12,241 |
|
Net income (loss) |
|
$ |
5,273 |
|
|
$ |
(15,015 |
) |
|
$ |
(33,496 |
) |
|
$ |
(12,605 |
) |
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.07 |
|
|
$ |
(0.21 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.18 |
) |
Diluted |
|
$ |
0.07 |
|
|
$ |
(0.21 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.18 |
) |
Weighted average shares: |
|
|
|
|
|
|
|
|
Basic |
|
|
72,616 |
|
|
|
72,023 |
|
|
|
72,448 |
|
|
|
71,962 |
|
Diluted |
|
|
72,785 |
|
|
|
72,023 |
|
|
|
72,448 |
|
|
|
71,962 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
|
2022 |
|
2021 |
|
% Change |
|
DIAGNOSTICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Infectious Disease Testing Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic HIV |
$ |
4,609 |
|
|
$ |
3,440 |
|
|
34 |
|
% |
|
$ |
12,115 |
|
$ |
12,490 |
|
(3 |
) |
% |
International HIV |
|
4,445 |
|
|
|
6,582 |
|
|
(32 |
) |
|
|
|
15,462 |
|
|
17,255 |
|
(10 |
) |
|
Net HIV revenues |
|
9,054 |
|
|
|
10,022 |
|
|
(10 |
) |
|
|
|
27,577 |
|
|
29,745 |
|
(7 |
) |
|
Domestic HCV |
|
1,866 |
|
|
|
1,827 |
|
|
2 |
|
|
|
|
6,440 |
|
|
5,580 |
|
15 |
|
|
International HCV |
|
1,368 |
|
|
|
888 |
|
|
54 |
|
|
|
|
3,742 |
|
|
3,802 |
|
(2 |
) |
|
Net HCV revenues |
|
3,234 |
|
|
|
2,715 |
|
|
19 |
|
|
|
|
10,182 |
|
|
9,382 |
|
9 |
|
|
Net OraQuick® revenues |
|
12,288 |
|
|
|
12,737 |
|
|
(4 |
) |
|
|
|
37,759 |
|
|
39,127 |
|
(3 |
) |
|
COVID-19 |
|
79,559 |
|
|
|
7,675 |
|
|
NM |
|
|
|
|
144,809 |
|
|
7,938 |
|
NM |
|
|
Other infectious disease revenues |
|
(40 |
) |
|
|
195 |
|
|
(121 |
) |
|
|
|
420 |
|
|
537 |
|
(22 |
) |
|
Total Infectious Disease |
|
91,807 |
|
|
|
20,607 |
|
|
346 |
|
|
|
|
182,988 |
|
|
47,602 |
|
284 |
|
|
Risk Assessment |
|
2,595 |
|
|
|
2,674 |
|
|
(3 |
) |
|
|
|
7,786 |
|
|
7,265 |
|
7 |
|
|
Other non-product revenues |
|
3,249 |
|
|
|
230 |
|
|
NM |
|
|
|
|
5,642 |
|
|
2,501 |
|
126 |
|
|
TOTAL DIAGNOSTIC NET REVENUE |
|
97,651 |
|
|
|
23,511 |
|
|
315 |
|
|
|
|
196,416 |
|
|
57,368 |
|
242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLECULAR SOLUTIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Genomics |
$ |
13,980 |
|
|
$ |
19,018 |
|
|
(26 |
) |
|
|
$ |
44,558 |
|
$ |
49,333 |
|
(10 |
) |
|
Microbiome |
|
1,761 |
|
|
|
1,693 |
|
|
4 |
|
|
|
|
5,583 |
|
|
5,888 |
|
(5 |
) |
|
COVID-19 |
|
361 |
|
|
|
6,255 |
|
|
(94 |
) |
|
|
|
9,522 |
|
|
46,209 |
|
(79 |
) |
|
Laboratory services |
|
1,957 |
|
|
|
2,406 |
|
|
(19 |
) |
|
|
|
4,895 |
|
|
8,017 |
|
(39 |
) |
|
Other product and services revenues |
|
360 |
|
|
|
576 |
|
|
(38 |
) |
|
|
|
1,892 |
|
|
1,235 |
|
53 |
|
|
Net product and service revenues |
|
18,419 |
|
|
|
29,948 |
|
|
(38 |
) |
|
|
|
66,450 |
|
|
110,682 |
|
(40 |
) |
|
Other non-product and service revenues |
|
393 |
|
|
|
458 |
|
|
(14 |
) |
|
|
|
1,535 |
|
|
2,056 |
|
(25 |
) |
|
TOTAL MOLECULAR SOLUTIONS NET REVENUE |
|
18,812 |
|
|
|
30,406 |
|
|
(38 |
) |
|
|
|
67,985 |
|
|
112,738 |
|
(40 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL NET REVENUES |
$ |
116,463 |
|
|
$ |
53,917 |
|
|
116 |
|
% |
|
$ |
264,401 |
|
$ |
170,106 |
|
55 |
|
% |
NM – not meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
(Unaudited) |
|
|
|
|
September 30, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
75,205 |
|
$ |
116,762 |
Short-term investments |
|
|
26,432 |
|
|
36,279 |
Accounts receivable, net |
|
|
61,306 |
|
|
45,323 |
Inventories |
|
|
78,805 |
|
|
53,138 |
Other current assets |
|
|
37,984 |
|
|
36,929 |
Property, plant and equipment, net |
|
|
85,184 |
|
|
88,164 |
Intangible assets, net |
|
|
11,919 |
|
|
14,343 |
Goodwill |
|
|
34,476 |
|
|
40,279 |
Long-term investments |
|
|
— |
|
|
17,009 |
Other noncurrent assets |
|
|
20,897 |
|
|
12,764 |
Total assets |
|
$ |
432,208 |
|
$ |
460,990 |
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
Accounts payable |
|
$ |
40,370 |
|
$ |
28,024 |
Deferred revenue |
|
|
2,536 |
|
|
2,936 |
Other current liabilities |
|
|
28,791 |
|
|
37,104 |
Other non-current liabilities |
|
|
18,621 |
|
|
12,393 |
Stockholders’ equity |
|
|
341,890 |
|
|
380,533 |
Total liabilities and stockholders’ equity |
|
$ |
432,208 |
|
$ |
460,990 |
|
|
|
|
|
Additional Financial Data (Unaudited) |
|
Nine Months Ended |
|
|
September 30, |
|
|
2022 |
|
2021 |
Capital expenditures |
|
$ |
29,030 |
|
$ |
27,508 |
Depreciation and amortization |
|
$ |
11,391 |
|
$ |
8,479 |
Stock-based compensation |
|
$ |
9,100 |
|
$ |
5,155 |
Cash used in operating activities |
|
$ |
29,190 |
|
$ |
22,598 |
|
|
|
|
|
Conference Call
The Company will host a conference call and
audio webcast for analysts and investors to discuss the Company’s
third quarter 2022 results and certain business developments,
beginning today at 5:00 p.m. Eastern Time (2:00 p.m.
Pacific Time). On the call will be Carrie Eglinton
Manner, President and Chief Executive Officer, Ken
McGrath, Chief Financial Officer, and Scott Gleason, SVP Investor
Relations and Corporate Communications. The call will include
prepared remarks by management and a question and answer
session.
In order to listen to the conference call,
please register to obtain a dial in and pin at the following
link:
https://register.vevent.com/register/BI4fc0d4827252407b870a0eab336a7950
To listen to the webcast, 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 14 days. It is recommended to dial-in 15 to 20
minutes prior to the call start to reduce waiting times. If a
participant will be listen-only, they are encouraged to listen via
the webcast on OraSure’s Investor Relations page.
About InteliSwab®
OraSure has received Emergency Use
Authorizations (EUA) from the FDA for its InteliSwab® COVID-19
rapid tests. The FDA has authorized the InteliSwab® COVID-19
Rapid Test for Over-the-Counter (OTC) use without a prescription.
The FDA has also authorized the InteliSwab® COVID-19 Rapid
Test Pro for professional use in point of care (POC) CLIA-waived
settings, and the InteliSwab® COVID-19 Rapid Test Rx for
Prescription Home Use. These remarkably simple COVID-19 lateral
flow tests use samples self-collected from the lower nostrils. The
InteliSwab®test’s unique design incorporates a built-in swab fully
integrated into the test stick. After users swab their lower
nostrils, the test stick is swirled in a pre-measured buffer
solution, and the result appears right on the test stick within 30
minutes, with no instruments, batteries, smartphone or laboratory
analysis needed to see the result. With less than one minute of
“hands-on time,” it is as simple as “Swab, Swirl, and See.”
This product has not been FDA cleared or
approved, but it has been authorized by the FDA under an EUA. The
emergency use of this product has been authorized only for the
detection of proteins from SARS-CoV-2, not for any other viruses or
pathogens. This product is only authorized for the duration of the
declaration that circumstances exist justifying the authorization
of emergency use of in vitro diagnostics for detection and/or
diagnosis of COVID-19 under Section 564(b)(1) of the Federal Food,
Drug and Cosmetic Act, 21 U.S.C. § 360bbb- 3(b)(1), unless the
declaration is terminated or authorization is revoked sooner.
Multiple government agencies, including the U.S.
Department of Defense (DoD) and Department of Health and Human
Services (HHS) are working to address COVID-19 testing needs.
Development of the InteliSwab® COVID-19 Rapid Test has been
funded in whole or in part with federal funds from the HHS; the
Administration for Strategic Preparedness and Response; Biomedical
Advanced Research and Development Authority, under contract numbers
75A50120C00061 and 75A50121C00078, utilizing Health Care
Enhancement Act (HCEA) funding. The DoD's Defense Assisted
Acquisition (DA2) Cell led the manufacturing expansion effort for
the InteliSwab® COVID-19 rapid test in coordination with the
Department of the Air Force’s Acquisition COVID-19 Task Force (DAF
ACT). The manufacturing effort was funded through the American
Rescue Plan Act (ARPA) to enable and support domestic industrial
base expansion for critical medical resources.
About OraSure Technologies
OraSure Technologies empowers the global
community to improve health and wellness by providing access to
accurate, essential information. OraSure, together with its
wholly-owned subsidiaries, DNA Genotek, Diversigen, and Novosanis,
provides its customers with end-to-end solutions that encompass
tools, services and diagnostics. The OraSure family of companies is
a leader in the development, manufacture, and distribution of rapid
diagnostic tests, sample collection and stabilization devices, and
molecular services solutions designed to discover and detect
critical medical conditions. OraSure’s portfolio of products is
sold globally to clinical laboratories, hospitals, physician’s
offices, clinics, public health and community-based organizations,
research institutions, government agencies, pharma, commercial
entities and direct to consumers. For more information on OraSure
Technologies, please
visit www.orasure.com.
Forward Looking Statements
This press release contains certain
forward-looking statements, including with respect to products,
product development activities, regulatory submissions and
authorizations, revenue growth, cost savings, cash flow, increasing
margins and other matters. 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: our ability to satisfy
customer demand; ability to reduce our spending rate, capitalize on
manufacturing efficiencies and drive profitable growth; ability to
market and sell products, whether through our internal, direct
sales force or third parties; impact of significant customer
concentration in the genomics business; failure of distributors or
other customers to meet purchase forecasts, historic purchase
levels or minimum purchase requirements for our products; 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 U.S. Food and Drug Administration (“FDA”) or other
regulators; the impact of the novel coronavirus (“COVID-19”)
pandemic on the Company's business, supply chain, labor force,
ability to successfully develop new products, validate the expanded
use of existing collector products, receive necessary regulatory
approvals and authorizations and commercialize such products for
COVID-19 testing, and demand for our COVID-19 testing products ;
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; ability to meet increased demand for
the Company’s products; impact of replacing distributors; inventory
levels at distributors and other customers; ability of the Company
to achieve its financial and strategic objectives and continue to
increase its revenues, including the ability to expand
international sales and the ability to continue to reduce costs;
impact of competitors, competing products and technology changes;
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 or urine testing, collection or other
products; market acceptance and uptake of microbiome informatics,
microbial genetics technology and related analytics services;
changes in market acceptance of products based on product
performance or other factors, including changes in testing
guidelines, algorithms or other recommendations by the Centers for
Disease Control and Prevention (“CDC”) or other agencies; 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; impact of
contracting with the U.S. government; impact of negative economic
conditions; ability to maintain 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 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, civil
unrest, hostilities and war ; and general political, business and
economic conditions, including inflationary pressures. These and
other factors that could affect our results are discussed more
fully in our SEC filings, including our registration statements,
Annual Report on Form 10-K for the year ended December 31, 2021,
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. Readers are
cautioned not to place undue reliance on the forward-looking
statements. The forward-looking statements are made as of the date
of this press release and OraSure Technologies undertakes no duty
to update these statements.
Statement Regarding Use of Non-GAAP
Financial Measures
In this press release, the company’s financial
results and financial guidance are provided in accordance with
accounting principles generally accepted in the United States
(GAAP) and using certain non-GAAP financial measures, including
non-GAAP gross margin, non-GAAP operating income (loss), and
non-GAAP earnings (loss) per share. Management believes that
presentation of operating results using these non-GAAP financial
measures provides useful supplemental information to investors and
facilitates the analysis of the company’s core operating results
and comparison of operating results across reporting periods, while
excluding certain expenses that may not be indicative of the
Company’s recurring core business operating results. In addition,
management believes these non-GAAP financial measures are useful to
investors both because they (1) allow for greater transparency with
respect to key metrics used by management in its financial and
operational decision-making and (2) are used by OraSure’s
institutional investors and the analysis community to help them
analyze the health of OraSure’s business. Management also uses
non-GAAP financial measures to establish budgets and to manage the
company’s business. A reconciliation of the GAAP financial results
to non-GAAP financial results is included in the schedules below
and a description of the adjustments made to the GAAP financial
measures is included at the end of the schedules.
The company encourages investors to carefully
consider its results under GAAP, as well as its supplemental
non-GAAP information and the reconciliation between these
presentations, to more fully understand its business. Non-GAAP
financial results are reported in addition to, and not as a
substitute for, or superior to, financial measures calculated in
accordance with GAAP. Further, non-GAAP financial measures, even if
similarly titled, may not be calculated in the same manner by all
companies, and therefore should not be compared.
|
|
|
|
|
|
|
|
OraSure Technologies GAAP to Non-GAAP Reconciliation ($ in
000's) |
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
116,463 |
|
|
$ |
53,917 |
|
|
$ |
264,401 |
|
|
$ |
170,106 |
|
GAAP Cost of Goods Sold |
|
70,271 |
|
|
|
32,449 |
|
|
|
166,353 |
|
|
|
79,639 |
|
GAAP Gross Margin |
|
40 |
% |
|
|
40 |
% |
|
|
37 |
% |
|
|
53 |
% |
Stock compensation |
|
(114 |
) |
|
|
276 |
|
|
|
191 |
|
|
|
410 |
|
Amortization of acquisition-related intangible assets |
|
132 |
|
|
|
132 |
|
|
|
396 |
|
|
|
396 |
|
Transformation related expenses |
|
419 |
|
|
|
- |
|
|
|
1,334 |
|
|
|
- |
|
Inventory reserve for excess levels |
|
- |
|
|
|
1,750 |
|
|
|
4,369 |
|
|
|
1,750 |
|
Non-GAAP Cost of Goods Sold |
|
69,834 |
|
|
|
30,291 |
|
|
|
160,063 |
|
|
|
77,083 |
|
Non-GAAP Gross Margin |
|
40 |
% |
|
|
44 |
% |
|
|
39 |
% |
|
|
55 |
% |
|
|
|
|
|
|
|
|
GAAP Operating Income (Loss) |
|
875 |
|
|
|
(13,013 |
) |
|
|
(36,392 |
) |
|
|
(793 |
) |
Stock compensation |
|
2,296 |
|
|
|
2,219 |
|
|
|
6,805 |
|
|
|
5,157 |
|
Amortization of acquisition-related intangible assets |
|
468 |
|
|
|
713 |
|
|
|
1,470 |
|
|
|
2,136 |
|
Inventory reserve for excess levels |
|
- |
|
|
|
1,750 |
|
|
|
4,369 |
|
|
|
1,750 |
|
Goodwill and long-lived assets impairment charges |
|
6,559 |
|
|
|
- |
|
|
|
17,101 |
|
|
|
- |
|
Transformation related expenses |
|
616 |
|
|
|
- |
|
|
|
5,671 |
|
|
|
- |
|
Severance expense |
|
558 |
|
|
|
- |
|
|
|
3,550 |
|
|
|
- |
|
Strategic alternative costs |
|
- |
|
|
|
- |
|
|
|
848 |
|
|
|
- |
|
Change in fair value of acquisition-related contingent
consideration |
|
- |
|
|
|
(500 |
) |
|
|
(36 |
) |
|
|
(1,526 |
) |
Non-GAAP Operating Income (Loss) |
|
11,372 |
|
|
|
(8,831 |
) |
|
|
3,386 |
|
|
|
6,724 |
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss) |
|
5,273 |
|
|
|
(15,015 |
) |
|
|
(33,496 |
) |
|
|
(12,605 |
) |
Stock compensation |
|
2,296 |
|
|
|
2,219 |
|
|
|
6,805 |
|
|
|
5,157 |
|
Amortization of acquisition-related intangible assets |
|
468 |
|
|
|
713 |
|
|
|
1,470 |
|
|
|
2,136 |
|
Inventory reserve for excess levels |
|
- |
|
|
|
1,750 |
|
|
|
4,369 |
|
|
|
1,750 |
|
Goodwill and long-lived assets impairment charges |
|
6,559 |
|
|
|
- |
|
|
|
17,101 |
|
|
|
- |
|
Transformation related expenses |
|
616 |
|
|
|
- |
|
|
|
5,671 |
|
|
|
- |
|
Severance expense |
|
558 |
|
|
|
- |
|
|
|
3,550 |
|
|
|
- |
|
Strategic alternative costs |
|
- |
|
|
|
- |
|
|
|
848 |
|
|
|
- |
|
Change in fair value of acquisition-related contingent
consideration |
|
- |
|
|
|
(500 |
) |
|
|
(36 |
) |
|
|
(1,526 |
) |
Tax effect of Non-GAAP adjustments |
|
(6,092 |
) |
|
|
(211 |
) |
|
|
(7,338 |
) |
|
|
(269 |
) |
Non-GAAP Net Income (Loss) |
$ |
9,678 |
|
|
$ |
(11,044 |
) |
|
$ |
(1,056 |
) |
|
$ |
(5,357 |
) |
|
|
|
|
|
|
|
|
GAAP Earnings (Loss) Per Share: |
$ |
0.07 |
|
|
$ |
(0.21 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.18 |
) |
Non-GAAP Earnings (Loss) Per Share: |
$ |
0.13 |
|
|
$ |
(0.15 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
Diluted Shares Outstanding |
|
72,785 |
|
|
|
72,023 |
|
|
|
72,448 |
|
|
|
71,962 |
|
|
|
|
|
|
|
|
|
Following is a description of the adjustments made to GAAP
financial measures:
- Stock Compensation:
non-cash equity-based compensation provided to OraSure employees
and directors, excluding accelerated stock compensation as required
under former employees’ employment agreements.
- Amortization of
acquisition-related intangible assets: represents recurring
amortization charges resulting from the acquisition of intangible
assets associated with our business combinations.
- Inventory reserve
for excess levels: reserves recorded for inventory balances that
are deemed excess based on current forecasts and expirations
dates.
- Transformation
related expenses: transitory costs such as consulting and
professional fees related to transformation initiatives.
- Goodwill and
long-live assets impairment charge: charges related to the write
down of company assets including PP&E and Goodwill
- Strategic
alternative costs: one-time expenses such as legal and banking fees
tied to the company’s strategic alternative process
- Severance
expenses: Expenses tied to executive severance agreements including
accelerated stock compensation
- Change in fair value of acquisition-related contingent
consideration: changes in the fair value of contingent
consideration liability associated with estimate changes in
reaching contingent consideration metrics.
- Tax impact
associated with non-GAAP adjustments – tax expense/(benefit) due to
non-GAAP adjustments
|
|
Investor
Contact: Scott Gleason SVP Investor Relations & Corp.
Communications 484-425-0588 sgleason@orasure.com |
Media
Contact:Amy KochSr. Mgr. Corporate
Communications484-523-1815media@orasure.com |
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