OraSure Announces 2018 Full Year and Fourth Quarter Financial Results
Financial Highlights
- Net revenues for the year ended
December 31, 2018 were$181.7 million , a 9% increase from 2017. Net product revenues were$165.4 million , representing 2% growth over 2017. - Net revenues for the fourth quarter of 2018 were
$50.2 million , a 3% decrease from the fourth quarter of 2017. Net product revenues were$44.8 million , representing an 11% decrease from the fourth quarter of 2017. - Molecular collection systems net revenues for the full year 2018, including royalty income from a litigation settlement, were
$96.1 million , up 28% from 2017. Molecular collection systems net revenues including royalty income were$30.2 million during the fourth quarter of 2018, up 2% from the fourth quarter of 2017. Molecular collection systems net product revenues during the year endedDecember 31, 2018 were$86.5 million , a 15% increase from the comparable period of 2017. Molecular collection systems net product revenues were$25.4 million during the fourth quarter of 2018, which represents a 15% decrease from the fourth quarter of 2017. - For the full year of 2018, international sales of the Company’s OraQuick® HIV products were
$21.8 million , an increase of 93% compared to 2017. International sales of the Company’s OraQuick® HIV products of$4.4 million in the fourth quarter of 2018 increased 23% compared to the fourth quarter of 2017. The increases in both periods were primarily the result of higher sales of the Company’s OraQuick® HIV Self-Test. - Full year 2018 international sales of the Company’s OraQuick® HCV product of
$4.9 million decreased 71% from 2017. International sales of the Company’s OraQuick® HCV product of$1.6 million increased 40% for the fourth quarter of 2018 compared to the fourth quarter of 2017. The decline for the full year was primarily the result of the non-renewal of a foreign government supply contract in support of a countrywide HCV eradication program at the end of 2017. This program contributed$11.8 million in sales during the full year of 2017 and$270,000 during the fourth quarter of 2017. The increase in the fourth quarter was due to continued growth inAsia and Africa. - Net income for the year ended
December 31, 2018 was$20.4 million , or$0.33 per share on a fully diluted basis, which compares to net income of$30.9 million , or$0.51 per share on a fully diluted basis, for 2017. Net income for 2018 included$1.2 million of pre-tax transaction costs associated with two recent acquisitions that closed in earlyJanuary 2019 and$9.6 million of pre-tax transition costs associated with the retirement of the Company’s former Chief Executive Officer and Chief Financial Officer and the hiring of their successors. The transaction costs were$0.02 per share and the transition costs were$0.15 per share for the year endedDecember 31 , 2018. The transition costs primarily consisted of non-cash stock compensation charges. Net income for the year endedDecember 31, 2017 included a$12.5 million gain related to the settlement of litigation against Ancestry.com DNA and its contract manufacturer. This gain was accounted for as a reduction of operating expenses and amounted to$0.15 per share on a fully diluted after-tax basis in that period. - Net income for the fourth quarter of 2018 was
$10.3 million , or$0.16 per share on a fully diluted basis, which compares to net income of$7.3 million , or$0.12 per share on a fully diluted basis, for the fourth quarter of 2017. Net income for the fourth quarter of 2018 included$1.2 million of pre-tax transaction costs related to the recent acquisitions and$974,000 of pre-tax transition costs associated with the Company’s executive management changes. The transaction and transition costs together were$0.04 per share for the fourth quarter of 2018. The transition costs in the fourth quarter consisted of non-cash stock compensation charges. - Cash and investments totaled
$201.3 million at December 31, 2018.
“With the highest annual revenues in our history and strong profitability, 2018 was another financially successful year for OraSure. Our OraQuick® international HIV business and our Molecular business continued to drive performance with double-digit growth from 2017 to 2018. Our 2018 microbiome revenues nearly doubled when compared to 2017,” said
Financial Results
Net product revenues for the year ended
Net product revenues for the fourth quarter of 2018 decreased 11% from the comparable period of 2017, primarily as a result of lower sales of the Company’s molecular collections products and lower domestic sales of the Company’s HIV and HCV tests, partially offset by higher international sales of the OraQuick® HIV Self-Test and OraQuick® HCV test.
Sales of the OraQuick® HIV Self-Test for the year and three months ended
Royalty income from a litigation settlement associated with a molecular collection device was
Gross profit percentage was 63% and 69% for the year and three months ended
For the year ended
Operating expenses increased to
Operating income for the year end
For the year ended
Income tax expense was
The Company’s cash and investment balance totaled
First Quarter 2019 Outlook
The Company expects net revenues to range from
“We believe that revenues for the second half of 2019 will be materially greater than in the first half of the year, as we have experienced in the past. Additionally, we expect that performance by our core businesses combined with additional acquisitions will support our growth in future periods,” Dr. Tang said.
Financial Data
Condensed Consolidated Financial Data | |||||||||||||||||
(In thousands, except per-share data) | |||||||||||||||||
Unaudited | |||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Results of Operations | |||||||||||||||||
Net revenues | $ | 50,246 | $ | 52,028 | $ | 181,743 | $ | 167,064 | |||||||||
Cost of products sold | 15,540 | 23,503 | 68,130 | 68,108 | |||||||||||||
Gross profit | 34,706 | 28,525 | 113,613 | 98,956 | |||||||||||||
Operating expenses: | |||||||||||||||||
Research and development | 4,059 | 3,829 | 16,250 | 13,365 | |||||||||||||
Sales and marketing | 8,377 | 6,991 | 30,609 | 28,532 | |||||||||||||
General and administrative | 9,758 | 7,544 | 38,325 | 29,321 | |||||||||||||
Gain on litigation settlement | — | — | — | (12,500 | ) | ||||||||||||
Total operating expenses | 22,194 | 18,364 | 85,184 | 58,718 | |||||||||||||
Operating income | 12,512 | 10,161 | 28,429 | 40,238 | |||||||||||||
Other income | 1,629 | 118 | 3,287 | 794 | |||||||||||||
Income before income taxes | 14,141 | 10,279 | 31,716 | 41,032 | |||||||||||||
Income tax expense | 3,843 | 2,963 | 11,320 | 10,084 | |||||||||||||
Net income | $ | 10,298 | $ | 7,316 | $ | 20,396 | $ | 30,948 | |||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.17 | $ | 0.12 | $ | 0.33 | $ | 0.52 | |||||||||
Diluted | $ | 0.16 | $ | 0.12 | $ | 0.33 | $ | 0.51 | |||||||||
Weighted average shares: | |||||||||||||||||
Basic | 61,268 | 60,652 | 61,112 | 59,050 | |||||||||||||
Diluted | 62,511 | 62,371 | 62,532 | 61,024 | |||||||||||||
Summary of Net Revenues by Market and Product Line (Unaudited) | Three Months Ended December 31, | |||||||||||||||||||
Dollars | Percentage of Total Net Revenues | |||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | ||||||||||||||||
Market | ||||||||||||||||||||
Infectious disease testing | $ | 13,643 | $ | 14,129 | (3 | ) | % | 27 | % | 27 | % | |||||||||
Risk assessment testing | 2,898 | 3,141 | (8 | ) | 6 | 6 | ||||||||||||||
Cryosurgical systems | 2,894 | 3,163 | (9 | ) | 6 | 6 | ||||||||||||||
Molecular collection systems | 25,407 | 29,784 | (15 | ) | 50 | 58 | ||||||||||||||
Net product revenues | 44,842 | 50,217 | (11 | ) | 89 | 97 | ||||||||||||||
Royalty income | 4,826 | - | N/A | 10 | - | |||||||||||||||
Other | 578 | 1,811 | (68 | ) | 1 | 3 | ||||||||||||||
Net revenues | $ | 50,246 | $ | 52,028 | (3 | ) | % | 100 | % | 100 | % | |||||||||
Year Ended December 31, | ||||||||||||||||||||
Dollars | Percentage of Total Net Revenues | |||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | ||||||||||||||||
Market | ||||||||||||||||||||
Infectious disease testing | $ | 56,148 | $ | 61,951 | (9 | ) | % | 31 | % | 37 | % | |||||||||
Risk assessment testing | 12,058 | 12,659 | (5 | ) | 7 | 8 | ||||||||||||||
Cryosurgical systems | 10,767 | 12,279 | (12 | ) | 6 | 7 | ||||||||||||||
Molecular collection systems | 86,455 | 75,099 | 15 | 47 | 45 | |||||||||||||||
Net product revenues | 165,428 | 161,988 | 2 | 91 | 97 | |||||||||||||||
Royalty income | 9,653 | - | N/A | 5 | - | |||||||||||||||
Other | 6,662 | 5,076 | 31 | 4 | 3 | |||||||||||||||
Net revenues | $ | 181,743 | $ | 167,064 | 9 | % | 100 | % | 100 | % | ||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | % Change |
|||||||||||||||||||
OraQuick® Revenues | ||||||||||||||||||||||||
Domestic HIV | $ | 4,974 | $ | 6,494 | (23 | ) | % | $ | 19,663 | $ | 23,847 | (18 | ) | % | ||||||||||
International HIV | 4,399 | 3,563 | 23 | 21,794 | 11,301 | 93 | ||||||||||||||||||
Net HIV revenues | 9,373 | 10,057 | (7 | ) | 41,457 | 35,148 | 18 | |||||||||||||||||
Domestic HCV | 2,066 | 2,468 | (16 | ) | 7,490 | 8,448 | (11 | ) | ||||||||||||||||
International HCV | 1,598 | 1,144 | 40 | 4,904 | 16,961 | (71 | ) | |||||||||||||||||
Net HCV revenues | 3,664 | 3,612 | 1 | 12,394 | 25,409 | (51 | ) | |||||||||||||||||
Net product revenues | $ | 13,037 | $ | 13,669 | (5 | ) | % | $ | 53,851 | $ | 60,557 | (11 | ) | % | ||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | % Change |
|||||||||||||||||||
Molecular Collection Systems Revenues | ||||||||||||||||||||||||
Genomics | $ | 23,505 | $ | 28,679 | (18 | ) | % | $ | 79,765 | $ | 71,611 | 11 | % | |||||||||||
Microbiome | 1,902 | 1,105 | 72 | 6,690 | 3,488 | 92 | ||||||||||||||||||
Net product revenues | $ | 25,407 | $ | 29,784 | (15 | ) | % | $ | 86,455 | $ | 75,099 | 15 | % | |||||||||||
Condensed Consolidated Balance Sheets (Unaudited)
December 31, 2018 | December 31, 2017 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 88,438 | $ | 72,869 | ||||
Short-term investments | 68,134 | 83,028 | ||||||
Accounts receivable, net | 34,842 | 42,521 | ||||||
Inventories | 22,888 | 19,343 | ||||||
Other current assets | 5,010 | 4,144 | ||||||
Property and equipment, net | 24,299 | 21,372 | ||||||
Intangible assets, net | 5,137 | 8,223 | ||||||
Goodwill | 18,521 | 20,083 | ||||||
Long-term investments | 44,752 | 20,690 | ||||||
Other non-current assets | 3,550 | 3,928 | ||||||
Total assets | $ | 315,571 | $ | 296,201 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accounts payable | $ | 10,598 | $ | 10,228 | ||||
Deferred revenue | 3,521 | 1,314 | ||||||
Other current liabilities | 13,861 | 20,695 | ||||||
Other non-current liabilities | 901 | 3,932 | ||||||
Deferred income taxes | 3,312 | 1,951 | ||||||
Stockholders’ equity | 283,378 | 258,081 | ||||||
Total liabilities and stockholders’ equity | $ | 315,571 | $ | 296,201 | ||||
Year Ended | ||||||||
December 31, | ||||||||
Additional Financial Data (Unaudited) | 2018 | 2017 | ||||||
Capital expenditures | $ | 6,344 | $ | 4,337 | ||||
Depreciation and amortization | $ | 7,222 | $ | 6,402 | ||||
Stock-based compensation | $ | 15,237 | $ | 6,973 | ||||
Cash provided by operating activities | $ | 39,090 | $ | 28,156 | ||||
Conference Call
The Company will host a conference call and audio webcast for analysts and investors to discuss the Company’s 2018 fourth quarter and full year financial results, certain business developments and financial guidance for the first quarter of 2019, beginning today at
In order to listen to the conference call, please either dial 844-831-3030 (Domestic) or 315-625-6887 (International) and reference Conference ID #2986827 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 midnight,
About
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: successfully managing and integrating acquisitions of other companies in a manner that complements or leverages our existing business, or otherwise expands or enhances our portfolio of products and our end-to-end service offerings, and the diversion of management’s attention from our ongoing business and regular business responsibilities to effect such integration; the expected economic benefits of acquisitions (and increased returns for our stockholders), including that the anticipated synergies, revenue enhancement strategies and other benefits from the acquisitions may not be fully realized or may take longer to realize than expected and our actual integration costs may exceed our estimates; 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
Company Contact:
Roberto Cuca | Jeanne Mell |
Chief Financial Officer 610-882-1820 |
VP Corporate Communications 484-353-1575 |
Investorinfo@orasure.com | media@orasure.com |
www.orasure.com | www.orasure.com |