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 December
31, 2022.
“This quarter we have delivered clear progress
on our transformation journey to Strengthen our foundation. We
identified meaningful expense reductions through restructuring our
two business units into a single organization, reducing our
non-production workforce by 11%, and lowering manufacturing costs.
Importantly, this quarter we further increased our cash balance
that will help fund investments for our future,” said OraSure
President and CEO Carrie Eglinton Manner.
She continued, “building from our stronger base,
our focus this year is to increasingly Elevate core growth across
our product lines by expanding our existing business, driving
internal innovation, and targeting key strategic partnerships. We
believe our actions will drive the Company to achieving cash flow
breakeven for the core business by the end of 2024 while we
Accelerate profitable growth.”
Financial Highlights
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Diagnostics |
$ |
18,400 |
|
|
$ |
17,898 |
|
|
3 |
|
% |
|
$ |
70,007 |
|
|
$ |
67,333 |
|
|
4 |
|
% |
InteliSwab |
|
88,857 |
|
|
|
14,770 |
|
|
502 |
|
|
|
|
233,666 |
|
|
|
22,707 |
|
|
929 |
|
|
Total Diagnostics |
|
107,257 |
|
|
|
32,668 |
|
|
228 |
|
|
|
|
303,673 |
|
|
|
90,040 |
|
|
237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Molecular Solutions |
|
15,684 |
|
|
|
22,936 |
|
|
(32 |
) |
|
|
|
74,147 |
|
|
|
89,467 |
|
|
(17 |
) |
|
COVID-19 kits |
|
137 |
|
|
|
7,964 |
|
|
(98 |
) |
|
|
|
9,659 |
|
|
|
54,167 |
|
|
(82 |
) |
|
Total Molecular Solutions |
|
15,821 |
|
|
|
30,900 |
|
|
(49 |
) |
|
|
|
83,806 |
|
|
|
143,634 |
|
|
(42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue |
$ |
123,078 |
|
|
$ |
63,568 |
|
|
94 |
|
% |
|
$ |
387,479 |
|
|
$ |
233,674 |
|
|
66 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year ended |
|
|
December 31, |
|
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
123,078 |
|
|
$ |
63,568 |
|
|
94 |
|
% |
|
$ |
387,479 |
|
|
$ |
233,674 |
|
|
66 |
|
% |
Gross profit |
|
49,589 |
|
|
|
27,133 |
|
|
83 |
|
|
|
|
147,637 |
|
|
|
117,600 |
|
|
26 |
|
|
Gross margin |
|
40% |
|
|
|
43% |
|
|
|
|
|
|
38% |
|
|
|
50% |
|
|
|
|
Non-GAAP gross profit |
|
50,126 |
|
|
|
28,685 |
|
|
75 |
|
|
|
|
154,464 |
|
|
|
121,708 |
|
|
27 |
|
|
Non-GAAP gross margin |
|
41% |
|
|
|
45% |
|
|
|
|
|
|
40% |
|
|
|
52% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
13,435 |
|
|
|
(9,371 |
) |
|
NM |
|
|
|
|
(22,957 |
) |
|
|
(10,164 |
) |
|
NM |
|
|
Operating margin |
|
11% |
|
|
|
-15% |
|
|
|
|
|
|
-6% |
|
|
|
-4% |
|
|
|
|
Non-GAAP operating income (loss) |
|
18,340 |
|
|
|
(1,336 |
) |
|
NM |
|
|
|
|
21,726 |
|
|
|
5,388 |
|
|
303 |
|
|
Non-GAAP operating income (loss) |
|
15% |
|
|
|
-2% |
|
|
|
|
|
|
6% |
|
|
|
2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
15,561 |
|
|
|
(10,393 |
) |
|
NM |
|
|
|
|
(17,935 |
) |
|
|
(22,998 |
) |
|
-22 |
|
|
Non-GAAP net income (loss) |
|
26,041 |
|
|
|
(2,490 |
) |
|
NM |
|
|
|
|
24,986 |
|
|
|
(7,847 |
) |
|
(418 |
) |
|
GAAP EPS |
$ |
0.21 |
|
|
|
($0.14 |
) |
|
NM |
|
|
|
|
($0.25 |
) |
|
|
($0.32 |
) |
|
(23 |
) |
|
Non-GAAP EPS |
$ |
0.36 |
|
|
|
($0.03 |
) |
|
NM |
|
% |
|
|
$0.34 |
|
|
|
($0.11 |
) |
|
(416 |
) |
% |
NM – not meaningful
- Net revenues for the fourth quarter
of 2022 were $123.1 million, a 94% increase from the fourth
quarter of 2021 and a new record for the Company.
- Total InteliSwab® test revenue of
$88.9 million increased 12% sequentially as the Company continued
to scale its production capacity and saw increased order volume
supporting the Federal government’s school testing program.
- Core Diagnostic revenue increased
3% versus the prior year primarily due to strong domestic growth in
HIV and HCV product sales. The Company experienced delays of a
large number of international diagnostic orders toward the end of
the quarter due to timing of product availability which we believe
will drive higher sales in the first quarter of 2023. Core
Molecular Solutions revenue decreased 32% year-over-year
predominantly due to lower order volumes at key customers. The
Company believes that some of this decline is associated with
customer destocking activity as many organizations focus on cash
balances given challenging financial conditions.
- GAAP gross margin percentage was
40.3% in the quarter compared to 42.7% in the fourth quarter of
2021. GAAP gross margins increased 60 basis points on a sequential
basis. Non-GAAP gross margins in the quarter were 40.7% compared to
45.1% in the fourth quarter of 2021 and Non-GAAP gross margins
increased 70 basis points on a sequential basis. On a
year-over-year basis, gross margins were negatively impacted
primarily by product mix, but improved sequentially with
efficiencies achieved with the Company’s InteliSwab® test
production.
- GAAP operating income in the fourth
quarter was $13.4 million which compares to a ($9.4) million
operating loss in the fourth quarter of 2021 and increased $12.6
million on a sequential basis. Non-GAAP operating income was $18.3
million in the quarter compared to a ($1.3) million operating loss
in the fourth quarter of 2021 and increased by $7.0 million on a
sequential basis. This was driven by higher revenue, improved gross
margins, and lower non-GAAP operating expenses which declined by
$3.5 million sequentially due to timing and cost control.
- Cash and short-term investments
increased $9.2M sequentially to $110.8 million in Q4 2022. Working
capital increased significantly in the fourth quarter, which the
Company believes will convert to cash as InteliSwab® revenues begin
to taper in the future.
Business Restructuring
The Company has shared a business restructuring
combining its Molecular Solutions and Diagnostics business units
into One OraSure. As part of the restructuring, the Company is
announcing role eliminations that will affect 11% of its current
non-production workforce. The Company believes that, when coupled
with additional cost savings, these changes will lead to annualized
operating expense reductions of approximately $15 million to be
fully implemented by the end of the second quarter of 2023. With
additional system changes and manufacturing site consolidation, the
Company targets achieving cash flow breakeven on base business
(excluding InteliSwab® revenue) by the end of calendar year 2024.
The Company’s profitability turnaround enables current cash
generation from InteliSwab® to be utilized for innovation and
future growth investments.
“To support our long-term goals and growth as an
organization, we’ve made the difficult decision to eliminate a
number of roles,” said OraSure President and CEO Carrie Eglinton
Manner. “The changes we made will streamline levels of leadership,
centralize core enterprise functions, and prioritize value creation
activities. We believe our new operating structure will unlock
significant operating efficiencies, foster stronger collaboration
across the organization, and allow us to increase our innovation
pipeline for growth.”
Recent Business Highlights
- Signed a deal with Quest
Diagnostics to serve as the preferred provider of saliva collection
kits for Quest’s Genomic Sequencing Services Group’s test
offerings.
- Received FDA approval for a new
packaging and labeling configuration for InteliSwab®. The Company
expects the new configuration to begin shipping by the end of March
2023. The packaging changes are expected to drive per test cost
savings of approximately $0.40 which includes the impact from lower
shipping costs based upon the smaller packaging configuration which
should reduce total truckloads by approximately 50%.
- Launched four new CE-IVD Collipee
urine collection products to support growing interest in
non-invasive HPV and STI screening diagnostics and liquid biopsy
from first-void urine samples. Included among these launches
is a product with a proprietary chemistry for cell-free DNA and
extra-cellular vesicles for oncology applications.
- Announced two new federal
government contracts for InteliSwab®. The first procurement
contract runs through November 2023; and, under the terms of the
award, the contract estimate is 18 million InteliSwab® COVID-19
Rapid Tests, with a maximum award of 36 million tests and a
guaranteed minimum award of 3.6 million tests. The second contract
was awarded for 3.2 million tests in December of 2022.
- Chosen as one of a group of
manufacturers to win a Connecticut tender that allows the Company
to compete for a total award of six million potential InteliSwab®
tests annually.
- Evaluating new respiratory
applications to build upon our COVID-19 success, including
internally and externally via strategic partnership.
- Pursuing additional 510(k)
clearances for the use of our proprietary collection kits in new
applications in women’s health and oncology, similar to our
recently announced co-clearance with Grifols.
- Announced that its OraQuick HIV®
Self-Test, in addition to its InteliSwab® test, is available for
purchase directly via Amazon with eligibility for Prime free
shipping.
- Noted that the first microbiome
based therapeutic received FDA approval which the Company views as
a signal of positive catalyst for investment in the microbiome
testing services industry.
Financial Guidance
The Company is guiding toward 1Q23 revenue of
$125 to $130 million representing 85% to 92% growth relative to the
first quarter of last year. Given the continued volatility with the
COVID-19 market, OraSure is only providing quarterly financial
guidance for fiscal year 2023; however, it is anticipating higher
revenue in the first half of the year followed by lower sales in
the second half as the Company works down its COVID-19 government
contracts.
Financial Data (Unaudited)
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Results of Operations |
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
123,078 |
|
|
$ |
63,568 |
|
|
$ |
387,479 |
|
|
$ |
233,674 |
|
Cost of products and services sold |
|
|
73,489 |
|
|
|
36,435 |
|
|
|
239,842 |
|
|
|
116,074 |
|
Gross profit |
|
|
49,589 |
|
|
|
27,133 |
|
|
|
147,637 |
|
|
|
117,600 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
8,999 |
|
|
|
8,900 |
|
|
|
36,237 |
|
|
|
34,170 |
|
Sales and marketing |
|
|
11,363 |
|
|
|
10,915 |
|
|
|
49,238 |
|
|
|
44,751 |
|
General and administrative |
|
|
15,944 |
|
|
|
16,648 |
|
|
|
68,206 |
|
|
|
50,328 |
|
Loss on impairment |
|
|
— |
|
|
|
— |
|
|
|
17,101 |
|
|
|
— |
|
Change in fair value of acquisition-related contingent
consideration |
|
|
(152 |
) |
|
|
41 |
|
|
|
(188 |
) |
|
|
(1,485 |
) |
Total operating expenses |
|
|
36,154 |
|
|
|
36,504 |
|
|
|
170,594 |
|
|
|
127,764 |
|
Operating income (loss) |
|
|
13,435 |
|
|
|
(9,371 |
) |
|
|
(22,957 |
) |
|
|
(10,164 |
) |
Other income |
|
|
1,960 |
|
|
|
443 |
|
|
|
6,480 |
|
|
|
872 |
|
Income (loss) before income taxes |
|
|
15,395 |
|
|
|
(8,928 |
) |
|
|
(16,477 |
) |
|
|
(9,292 |
) |
Income tax expense (benefit) |
|
|
(166 |
) |
|
|
1,465 |
|
|
|
1,458 |
|
|
|
13,706 |
|
Net income (loss) |
|
$ |
15,561 |
|
|
$ |
(10,393 |
) |
|
$ |
(17,935 |
) |
|
$ |
(22,998 |
) |
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.21 |
|
|
$ |
(0.14 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.32 |
) |
Diluted |
|
$ |
0.21 |
|
|
$ |
(0.14 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.32 |
) |
Weighted average shares: |
|
|
|
|
|
|
|
|
Basic |
|
|
72,734 |
|
|
|
72,040 |
|
|
|
72,505 |
|
|
|
71,981 |
|
Diluted |
|
|
73,248 |
|
|
|
72,040 |
|
|
|
72,505 |
|
|
|
71,981 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
|
2022 |
|
|
2021 |
|
% Change |
|
|
|
2022 |
|
|
2021 |
|
% Change |
|
DIAGNOSTICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Infectious Disease Testing Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic HIV |
$ |
4,126 |
|
$ |
3,773 |
|
9 |
|
% |
|
$ |
16,241 |
|
$ |
16,641 |
|
(2 |
) |
% |
International HIV |
|
7,109 |
|
|
8,626 |
|
(18 |
) |
|
|
|
22,571 |
|
|
25,503 |
|
(11 |
) |
|
Net HIV revenues |
|
11,235 |
|
|
12,399 |
|
(9 |
) |
|
|
|
38,812 |
|
|
42,144 |
|
(8 |
) |
|
Domestic HCV |
|
1,913 |
|
|
1,301 |
|
47 |
|
|
|
|
8,353 |
|
|
6,881 |
|
21 |
|
|
International HCV |
|
1,274 |
|
|
1,100 |
|
16 |
|
|
|
|
5,016 |
|
|
4,902 |
|
2 |
|
|
Net HCV revenues |
|
3,187 |
|
|
2,401 |
|
33 |
|
|
|
|
13,369 |
|
|
11,783 |
|
13 |
|
|
Net OraQuick® revenues |
|
14,422 |
|
|
14,800 |
|
(3 |
) |
|
|
|
52,181 |
|
|
53,927 |
|
(3 |
) |
|
COVID-19 |
|
88,857 |
|
|
14,770 |
|
502 |
|
|
|
|
233,666 |
|
|
22,707 |
|
929 |
|
|
Other infectious disease revenues |
|
127 |
|
|
183 |
|
(31 |
) |
|
|
|
547 |
|
|
718 |
|
(24 |
) |
|
Total Infectious Disease |
|
103,406 |
|
|
29,753 |
|
248 |
|
|
|
|
286,394 |
|
|
77,352 |
|
270 |
|
|
Risk Assessment |
|
2,483 |
|
|
2,406 |
|
3 |
|
|
|
|
10,269 |
|
|
9,678 |
|
6 |
|
|
Other non-product revenues |
|
1,368 |
|
|
509 |
|
169 |
|
|
|
|
7,010 |
|
|
3,010 |
|
133 |
|
|
TOTAL DIAGNOSTIC NET REVENUE |
|
107,257 |
|
|
32,668 |
|
228 |
|
|
|
|
303,673 |
|
|
90,040 |
|
237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLECULAR SOLUTIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Genomics |
$ |
9,777 |
|
$ |
14,017 |
|
(30 |
) |
|
|
$ |
54,335 |
|
$ |
63,350 |
|
(14 |
) |
|
Microbiome |
|
1,920 |
|
|
2,050 |
|
(6 |
) |
|
|
|
7,503 |
|
|
7,944 |
|
(6 |
) |
|
COVID-19 |
|
137 |
|
|
7,964 |
|
(98 |
) |
|
|
|
9,659 |
|
|
54,167 |
|
(82 |
) |
|
Laboratory services |
|
2,401 |
|
|
3,824 |
|
(37 |
) |
|
|
|
7,296 |
|
|
11,840 |
|
(38 |
) |
|
Other product and services revenues |
|
699 |
|
|
1,334 |
|
(48 |
) |
|
|
|
2,591 |
|
|
2,566 |
|
1 |
|
|
Net product and service revenues |
|
14,934 |
|
|
29,189 |
|
(49 |
) |
|
|
|
81,384 |
|
|
139,867 |
|
(42 |
) |
|
Other non-product and service revenues |
|
887 |
|
|
1,711 |
|
(48 |
) |
|
|
|
2,422 |
|
|
3,767 |
|
(36 |
) |
|
TOTAL MOLECULAR SOLUTIONS NET REVENUE |
|
15,821 |
|
|
30,900 |
|
(49 |
) |
|
|
|
83,806 |
|
|
143,634 |
|
(42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL NET REVENUES |
$ |
123,078 |
|
$ |
63,568 |
|
94 |
|
% |
|
$ |
387,479 |
|
$ |
233,674 |
|
66 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
(Unaudited) |
|
|
|
|
December 31, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
83,980 |
|
$ |
116,762 |
Short-term investments |
|
|
26,867 |
|
|
36,279 |
Accounts receivable, net |
|
|
70,797 |
|
|
45,323 |
Inventories |
|
|
96,232 |
|
|
53,138 |
Other current assets |
|
|
47,842 |
|
|
47,804 |
Property, plant and equipment, net |
|
|
59,413 |
|
|
73,435 |
Intangible assets, net |
|
|
11,694 |
|
|
14,343 |
Goodwill |
|
|
35,104 |
|
|
40,279 |
Long-term investments |
|
|
— |
|
|
17,009 |
Other noncurrent assets |
|
|
12,779 |
|
|
16,618 |
Total assets |
|
$ |
444,708 |
|
$ |
460,990 |
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
Accounts payable |
|
$ |
39,349 |
|
$ |
28,024 |
Deferred revenue |
|
|
2,273 |
|
|
2,936 |
Other current liabilities |
|
|
28,770 |
|
|
37,104 |
Other non-current liabilities |
|
|
10,692 |
|
|
12,393 |
Stockholders’ equity |
|
|
363,624 |
|
|
380,533 |
Total liabilities and stockholders’ equity |
|
$ |
444,708 |
|
$ |
460,990 |
|
|
|
|
|
Additional Financial Data (Unaudited) |
|
Year Ended |
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
Capital expenditures |
|
$ |
4,545 |
|
|
$ |
48,117 |
Depreciation and amortization |
|
$ |
15,308 |
|
|
$ |
11,658 |
Stock-based compensation |
|
$ |
11,622 |
|
|
$ |
7,807 |
Cash used in operating activities |
|
$ |
(47,202 |
) |
|
$ |
35,382 |
Conference Call
The Company will host a conference call and
audio webcast for analysts and investors to discuss the Company’s
fourth 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/BIf712ba49243f46c7a741f490d1ea19a4
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 Department
of Health and Human Services; Administration for Strategic
Preparedness and Response; Biomedical Advanced Research and
Development Authority, under contract number 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
achieve the anticipated cost savings as a result of our business
restructuring; 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 |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
123,078 |
|
|
$ |
63,568 |
|
|
$ |
387,479 |
|
|
$ |
233,674 |
|
|
GAAP Cost of Goods Sold |
$ |
73,489 |
|
|
|
36,435 |
|
|
|
239,842 |
|
|
|
116,074 |
|
|
GAAP Gross Margin |
|
40% |
|
|
|
43% |
|
|
|
38% |
|
|
|
50% |
|
|
Stock compensation |
|
140 |
|
|
|
162 |
|
|
|
331 |
|
|
|
572 |
|
|
Amortization of acquisition-related intangible assets |
|
132 |
|
|
|
132 |
|
|
|
528 |
|
|
|
528 |
|
|
Transformation related expenses |
|
265 |
|
|
|
- |
|
|
|
1,599 |
|
|
|
- |
|
|
Inventory reserve for excess levels |
|
- |
|
|
|
1,258 |
|
|
|
4,369 |
|
|
|
3,008 |
|
|
Non-GAAP Cost of Goods Sold |
|
72,952 |
|
|
|
34,883 |
|
|
|
233,015 |
|
|
|
111,966 |
|
|
Non-GAAP Gross Margin |
|
40.7% |
|
|
|
45.1% |
|
|
|
39.9% |
|
|
|
52.1% |
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Income (Loss) |
|
13,435 |
|
|
|
(9,371 |
) |
|
|
(22,957 |
) |
|
|
(10,164 |
) |
|
Stock compensation |
|
2,349 |
|
|
|
2,020 |
|
|
|
9,154 |
|
|
|
7,177 |
|
|
Amortization of acquisition-related intangible assets |
|
467 |
|
|
|
707 |
|
|
|
1,937 |
|
|
|
2,843 |
|
|
Inventory reserve for excess levels |
|
- |
|
|
|
1,258 |
|
|
|
4,369 |
|
|
|
3,008 |
|
|
Loss on impairment |
|
- |
|
|
|
- |
|
|
|
17,101 |
|
|
|
- |
|
|
Transformation related expenses |
|
520 |
|
|
|
1,200 |
|
|
|
6,191 |
|
|
|
1,200 |
|
|
Severance expense |
|
300 |
|
|
|
2,683 |
|
|
|
3,850 |
|
|
|
2,683 |
|
|
Strategic alternative costs |
|
- |
|
|
|
126 |
|
|
|
848 |
|
|
|
126 |
|
|
Government grant accounting |
|
1,422 |
|
|
|
- |
|
|
|
1,422 |
|
|
|
- |
|
|
Change in fair value of acquisition-related contingent
consideration |
|
(152 |
) |
|
|
41 |
|
|
|
(188 |
) |
|
|
(1,485 |
) |
|
Non-GAAP Operating Income (Loss) |
|
18,340 |
|
|
|
(1,336 |
) |
|
|
21,726 |
|
|
|
5,388 |
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss) |
|
15,561 |
|
|
|
(10,393 |
) |
|
|
(17,935 |
) |
|
|
(22,998 |
) |
|
Stock compensation |
|
2,349 |
|
|
|
2,020 |
|
|
|
9,154 |
|
|
|
7,177 |
|
|
Amortization of acquisition-related intangible assets |
|
467 |
|
|
|
707 |
|
|
|
1,937 |
|
|
|
2,843 |
|
|
Inventory reserve for excess levels |
|
- |
|
|
|
1,258 |
|
|
|
4,369 |
|
|
|
3,008 |
|
|
Loss on impairment |
|
- |
|
|
|
- |
|
|
|
17,101 |
|
|
|
- |
|
|
Transformation related expenses |
|
520 |
|
|
|
1,200 |
|
|
|
6,191 |
|
|
|
1,200 |
|
|
Severance expense |
|
300 |
|
|
|
2,683 |
|
|
|
3,850 |
|
|
|
2,683 |
|
|
Strategic alternative costs |
|
- |
|
|
|
126 |
|
|
|
848 |
|
|
|
126 |
|
|
Change in fair value of acquisition-related contingent
consideration |
|
(152 |
) |
|
|
41 |
|
|
|
(188 |
) |
|
|
(1,485 |
) |
|
Tax effect of Non-GAAP adjustments |
|
6,997 |
|
|
|
(132 |
) |
|
|
(340 |
) |
|
|
(401 |
) |
|
Non-GAAP Net Income (Loss) |
$ |
26,041 |
|
|
$ |
(2,490 |
) |
|
$ |
24,986 |
|
|
$ |
(7,847 |
) |
|
|
|
|
|
|
|
|
|
|
GAAP Earnings (Loss) Per Share: |
$ |
0.21 |
|
|
($ |
0.14 |
) |
|
($ |
0.25 |
) |
|
($ |
0.32 |
) |
|
Non-GAAP Earnings (Loss) Per Share: |
$ |
0.36 |
|
|
($ |
0.03 |
) |
|
$ |
0.34 |
|
|
($ |
0.11 |
) |
|
Diluted Shares Outstanding |
|
73,248 |
|
|
|
72,040 |
|
|
|
72,505 |
|
|
|
71,981 |
|
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
- Loss on impairment: charges related to the write down of
company assets including PP&E and Goodwill
- Transformation
related expenses: transitory costs such as consulting and
professional fees related to transformation initiatives
- 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
- Government
contract accounting: As required under International Accounting
Standard Board IAS 20, Accounting for Government Contracts and
Disclosure of Government Assistance, our operating expenses
associated with the Department of Defense expansion contract are
reflected in operating expenses with offsetting reimbursement
reflected in other income
- 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: |
Media Contact: |
Scott Gleason |
Amy Koch |
SVP Investor Relations &
Corp. Communications |
Sr. Mgr. Corporate
Communications |
484-425-0588 |
484-523-1815 |
sgleason@orasure.com |
media@orasure.com |
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