OraSure Announces 2018 Third Quarter Financial Results
Financial Highlights
- Net revenues for the third quarter of 2018 were
$45.9 million , an 8% increase from the third quarter of 2017. Net product revenues were$43.5 million , representing a 6% increase from the third quarter of 2017. - Net revenues for the nine months ended September 30, 2018 were
$131.5 million , a 14% increase from the comparable period of 2017. Net product revenues for the first nine months of 2018 were$120.6 million , representing an 8% increase over the first nine months of 2017. - Net molecular collection systems revenues were
$25.5 million during the third quarter of 2018, which represents a 37% increase over the third quarter of 2017. Net molecular collection systems revenues during the nine months ended September 30, 2018 were$61.0 million , a 35% increase from the comparable period of 2017. - International sales of the Company’s OraQuick® HIV products of
$4.3 million increased 41% compared to the third quarter of 2017. For the first nine months of 2018, international sales of the Company’s OraQuick® HIV products of$17.4 million increased 125% compared to the first nine months of 2017. The increases in both periods were primarily the result of higher sales of the Company’s OraQuick® HIV Self-Test. - International sales of the Company’s OraQuick® HCV product of
$1.2 million decreased 81% for the third quarter of 2018 compared to the third quarter of 2017. International sales of the Company’s OraQuick® HCV product of$3.3 million for the first nine months of 2018 decreased 79% from the comparable period of 2017. These declines were 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$4.7 million of sales during the third quarter of 2017 and$11.6 million during the first nine months of 2017. - Net income for the third quarter of 2018 was
$8.1 million , or$0.13 per share on a fully diluted basis, which compares to net income of$5.8 million , or$0.09 per share on a fully diluted basis, for the third quarter of 2017. Net income for the nine months ended September 30, 2018 was$10.1 million , or$0.16 per share on a fully diluted basis, which compares to net income of$23.6 million , or$0.39 per share on a fully diluted basis, for the comparable period of 2017. Net income for the year-to-date period included$8.6 million of transition costs associated with the retirement of the Company’s former Chief Executive Officer and Chief Financial Officer and the hiring of their successors. These transition costs approximated$0.14 per share for the nine month period endedSeptember 30, 2018 and primarily consisted of non-cash stock compensation charges. Net income for the nine months endedSeptember 30, 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 approximated$0.15 per share on a fully diluted after-tax basis in that period. - Cash and investments totaled
$192.1 million at September 30, 2018.
“Our solid third quarter performance was driven by strong growth in our molecular collections and international HIV Self-Test businesses,” said Dr.
Financial Results
Net product revenues for the third quarter of 2018 increased 6% from the comparable period of 2017, primarily as a result of higher sales of the Company’s molecular collections products and higher international sales of the OraQuick® HIV Self-Test, partially offset by lower international sales of the Company’s OraQuick® HCV test and lower domestic sales of the professional OraQuick® HIV test.
Net product revenues for the first nine months of 2018 increased 8% over the comparable period of 2017, primarily as a result of higher sales of the Company’s molecular collection systems products and higher international sales of the OraQuick® HIV Self-Test, partially offset by lower sales of the Company’s HCV product, lower domestic sales of the professional OraQuick® HIV test and lower sales of the Company’s cryosurgical systems products.
Sales of the OraQuick® HIV Self-Test for the three and nine months ended
Other revenues were
Gross profit percentage was 62% and 60% for the three and nine months ended September 30, 2018, respectively, and 58% and 61% for the three and nine months ended September 30, 2017, respectively. Gross profit percentage in the current quarter benefited from lower manufacturing costs associated with the Company’s Oragene® product, lower royalty expense, and the increase in other revenues. The decline in gross profit percentage for the first nine months of 2018 was primarily due to an increase in lower profit percentage product sales partially offset by the increase in other revenues.
Operating expenses increased modestly to
The Company reported operating income of
Income tax expense was
The Company’s cash and investment balance totaled
Fourth Quarter 2018 Outlook
The Company expects net revenues to range from
Financial Data
Condensed Consolidated Financial Data | ||||||||||||||
(In thousands, except per-share data) | ||||||||||||||
Unaudited | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Results of Operations | ||||||||||||||
Net revenues | $ | 45,885 | $ | 42,314 | $ | 131,497 | $ | 115,036 | ||||||
Cost of products sold | 17,340 | 17,670 | 52,590 | 44,605 | ||||||||||
Gross profit | 28,545 | 24,644 | 78,907 | 70,431 | ||||||||||
Operating expenses: | ||||||||||||||
Research and development | 3,855 | 3,228 | 12,191 | 9,536 | ||||||||||
Sales and marketing | 7,304 | 7,162 | 22,232 | 21,541 | ||||||||||
General and administrative | 6,529 | 6,935 | 28,567 | 21,777 | ||||||||||
Gain on litigation settlement | — | — | — | (12,500 | ) | |||||||||
Total operating expenses | 17,688 | 17,325 | 62,990 | 40,354 | ||||||||||
Operating income | 10,857 | 7,319 | 15,917 | 30,077 | ||||||||||
Other income | 510 | 113 | 1,658 | 676 | ||||||||||
Income before income taxes | 11,367 | 7,432 | 17,575 | 30,753 | ||||||||||
Income tax expense | 3,271 | 1,669 | 7,477 | 7,121 | ||||||||||
Net income | $ | 8,096 | $ | 5,763 | $ | 10,098 | $ | 23,632 | ||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.13 | $ | 0.10 | $ | 0.17 | $ | 0.40 | ||||||
Diluted | $ | 0.13 | $ | 0.09 | $ | 0.16 | $ | 0.39 | ||||||
Weighted average shares: | ||||||||||||||
Basic | 61,208 | 60,090 | 61,059 | 58,511 | ||||||||||
Diluted | 62,606 | 62,172 | 62,539 | 60,569 | ||||||||||
Summary of Net Revenues by Market and Product (Unaudited)
Three Months Ended September 30, | ||||||||||||||||||||||
Dollars | Percentage of Total Net Revenues |
|||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | ||||||||||||||||||
Market | ||||||||||||||||||||||
Infectious disease testing | $ | 12,417 | $ | 16,577 | (25 | ) | % | 27 | % | 39 | % | |||||||||||
Risk assessment testing | 2,842 | 3,149 | (10 | ) | 6 | 7 | ||||||||||||||||
Cryosurgical systems | 2,696 | 2,879 | (6 | ) | 6 | 7 | ||||||||||||||||
Molecular collection systems | 25,495 | 18,552 | 37 | 56 | 44 | |||||||||||||||||
Net product revenues | 43,450 | 41,157 | 6 | 95 | 97 | |||||||||||||||||
Other | 2,435 | 1,157 | 110 | 5 | 3 | |||||||||||||||||
Net revenues | $ | 45,885 | $ | 42,314 | 8 | % | 100 | % | 100 | % | ||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||
Dollars | Percentage of Total Net Revenues |
||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | |||||||||||||||||||
Market | |||||||||||||||||||||||
Infectious disease testing | $ | 42,506 | $ | 47,822 | (11 | ) | % | 33 | % | 42 | % | ||||||||||||
Risk assessment testing | 9,159 | 9,517 | (4 | ) | 7 | 8 | |||||||||||||||||
Cryosurgical systems | 7,874 | 9,116 | (14 | ) | 6 | 8 | |||||||||||||||||
Molecular collection systems | 61,047 | 45,316 | 35 | 46 | 39 | ||||||||||||||||||
Net product revenues | 120,586 | 111,771 | 8 | 92 | 97 | ||||||||||||||||||
Other | 10,911 | 3,265 | 234 | 8 | 3 | ||||||||||||||||||
Net revenues | $ | 131,497 | $ | 115,036 | 14 | % | 100 | % | 100 | % | |||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | % Change |
|||||||||||||||||||||
OraQuick® Revenues | ||||||||||||||||||||||||||
Domestic HIV | $ | 2,749 | $ | 3,622 | (24 | ) | % | $ | 10,043 | $ | 12,401 | (19 | ) | % | ||||||||||||
International HIV | 4,328 | 3,069 | 41 | 17,395 | 7,738 | 125 | ||||||||||||||||||||
Domestic OTC HIV | 1,706 | 1,515 | 13 | 4,646 | 4,951 | (6 | ) | |||||||||||||||||||
Net HIV revenues | 8,783 | 8,206 | 7 | 32,084 | 25,090 | 28 | ||||||||||||||||||||
Domestic HCV | 2,066 | 1,889 | 9 | 5,424 | 5,980 | (9 | ) | |||||||||||||||||||
International HCV | 1,168 | 6,154 | (81 | ) | 3,306 | 15,817 | (79 | ) | ||||||||||||||||||
Net HCV revenues | 3,234 | 8,043 | (60 | ) | 8,730 | 21,797 | (60 | ) | ||||||||||||||||||
Net product revenues | $ | 12,017 | $ | 16,249 | (26 | ) | % | $ | 40,814 | $ | 46,887 | (13 | ) | % | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | % Change |
|||||||||||||||||||||
Cryosurgical Systems Revenues | ||||||||||||||||||||||||||
Domestic professional | $ | 1,349 | $ | 1,426 | (5 | ) | % | $ | 3,292 | $ | 4,368 | (25 | ) | % | ||||||||||||
International professional | 220 | 179 | 23 | 633 | 552 | 15 | ||||||||||||||||||||
Domestic OTC | 333 | 325 | 2 | 917 | 957 | (4 | ) | |||||||||||||||||||
International OTC | 794 | 949 | (16 | ) | 3,032 | 3,239 | (6 | ) | ||||||||||||||||||
Net product revenues | $ | 2,696 | $ | 2,879 | (6 | ) | % | $ | 7,874 | $ | 9,116 | (14 | ) | % | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | % Change |
|||||||||||||||||||||
Molecular Collection Systems Revenues | ||||||||||||||||||||||||||
Commercial Genomics | $ | 21,505 | $ | 14,544 | 48 | % | $ | 48,024 | $ | 34,615 | 39 | % | ||||||||||||||
Academic Genomics | 2,299 | 3,232 | (29 | ) | 8,236 | 8,316 | (1 | ) | ||||||||||||||||||
Microbiome | 1,691 | 776 | 118 | 4,787 | 2,385 | 101 | ||||||||||||||||||||
Net product revenues | $ | 25,495 | $ | 18,552 | 37 | % | $ | 61,047 | $ | 45,316 | 35 | % | ||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | % Change |
||||||||||||||||||||
Other Revenues | |||||||||||||||||||||||||
Royalty income | $ | 1,132 | $ | — | N/A | $ | 4,827 | $ | — | N/A | |||||||||||||||
BARDA funding | 1,083 | 939 | 15 | % | 4,540 | 3,047 | 49 | % | |||||||||||||||||
Charitable support reimbursement | 220 | 218 | 1 | 1,544 | 218 | 608 | |||||||||||||||||||
Other revenues | $ | 2,435 | $ | 1,157 | 110 | % | $ | 10,911 | $ | 3,265 | 234 | % | |||||||||||||
Condensed Consolidated Balance Sheets (Unaudited)
September 30, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 78,146 | $ | 72,869 | |||
Short-term investments | 72,192 | 83,028 | |||||
Accounts receivable, net | 33,284 | 42,521 | |||||
Inventories | 19,899 | 19,343 | |||||
Other current assets | 4,376 | 4,144 | |||||
Property and equipment, net | 24,395 | 21,372 | |||||
Intangible assets, net | 6,053 | 8,223 | |||||
Goodwill | 19,568 | 20,083 | |||||
Long-term investments | 41,788 | 20,690 | |||||
Other non-current assets | 4,606 | 3,928 | |||||
Total assets | $ | 304,307 | $ | 296,201 | |||
Liabilities and Stockholders’ Equity | |||||||
Accounts payable | $ | 8,064 | $ | 10,228 | |||
Deferred revenue | 3,106 | 1,314 | |||||
Other current liabilities | 10,250 | 20,695 | |||||
Other non-current liabilities | 4,649 | 3,932 | |||||
Deferred income taxes | 1,484 | 1,951 | |||||
Stockholders’ equity | 276,754 | 258,081 | |||||
Total liabilities and stockholders’ equity | $ | 304,307 | $ | 296,201 | |||
Nine Months Ended | |||||||
September 30, | |||||||
Additional Financial Data (Unaudited) | 2018 | 2017 | |||||
Capital expenditures | $ | 5,938 | $ | 3,462 | |||
Depreciation and amortization | $ | 5,588 | $ | 4,589 | |||
Stock-based compensation | $ | 12,526 | $ | 5,213 | |||
Cash provided by operating activities | $ | 24,807 | $ | 30,361 | |||
Conference Call
The Company will host a conference call and audio webcast for analysts and investors to discuss the Company’s 2018 third quarter financial results, certain business developments and financial guidance for the fourth quarter of 2018, 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 #8850417 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: 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 |
Chief Financial Officer 610-882-1820 |
Investorinfo@orasure.com |
www.orasure.com |