OraSure Announces 2019 First Quarter Financial Results
“Our first quarter 2019 performance was in line with our expectations for both the top and bottom lines,” said
“We continue to diversify our molecular collections business and are seeing opportunity in key segments of the genomics market. Our microbiome business has continued to grow year-over-year in every quarter since we first began breaking out its revenues in 2016. Our HCV business grew both domestically and internationally, and we expect our OraQuick® HIV sales to show solid growth for the full year. Our recent acquisitions are just the first examples of implementation of our growth strategy and we remain committed to making additional strategic growth investments.”
Financial and Business Highlights
- In
January 2019 , the Company acquired innovation growth companiesNovosanis NV andCoreBiome, Inc. for an aggregate purchase price of approximately$13.3 million . Novosanis is a leader in urine sample collection devices targeted primarily at the liquid biopsy, sexually transmitted infection screening, and urological cancer markets, and CoreBiome is an early-stage microbiome services provider that accelerates discovery for customers in the pharmaceutical, agricultural and research communities. The sales generated by these new subsidiaries are included in the revenues of the Company’s molecular collection systems segment. - The Company’s financial performance during the first quarter of 2019 was in line with expectations. Net revenues for the first quarter of 2019 were
$30.1 million , a 28% decrease from the first quarter of 2018. Net product revenues were$28.3 million , representing a 26% decrease from the first quarter of 2018. These decreases were primarily the result of a previously-disclosed change in marketing strategy by a large consumer genetics customer. - International sales of the Company’s OraQuick® HCV product of
$1.5 million increased 119% for the first quarter of 2019 compared to the first quarter of 2018. Domestic sales of the Company’s OraQuick® HCV product of$1.8 million increased 12% over the comparable period of the prior year. - International sales of the Company’s OraQuick® HIV products of
$4.0 million in the first quarter of 2019 decreased 30% compared to the first quarter of 2018. Domestic sales of the Company’s OraQuick® HIV products of$4.3 million decreased 14% compared to the comparable period of the prior year. - Molecular collection systems revenues including royalty income and other revenues were
$11.9 million during the first quarter of 2019, a decline of 40% from the first quarter of 2018. Molecular collection systems product and service revenues were$10.6 million during the first quarter of 2019, which represents a 42% decrease from the first quarter of 2018. - Net loss for the first quarter of 2019 was
$3.3 million , or$0.05 per share, which compares to a net loss of$2.1 million , or$0.03 per share, for the first quarter of 2018. Net loss for the first quarter of 2019 included acquisition-related charges of$1.3 million for the change in fair value of contingent consideration and$597,000 of transaction costs. These charges had a combined impact of approximately$0.03 per share. The net loss for the first quarter of 2018 included$6.4 million of pre-tax transition costs, or$0.10 per share, associated with executive management changes which occurred in 2018. These transition costs primarily consisted of non-cash stock compensation charges. - Cash and investments totaled
$183.6 million at March 31, 2019.
Financial Results
Net product revenues for the first quarter of 2019 decreased 26% from the comparable period of 2018, primarily as a result of lower sales of the Company’s molecular collections products and OraQuick® HIV tests, partially offset by higher OraQuick® HCV test sales.
International sales of the OraQuick® HIV Self-Test for the three months ended
Royalty income from a litigation settlement associated with a molecular collection device was
Gross profit percentage was 60% and 58% for the three months ended
For the three months ended
The Company reported an operating loss of
During the first quarter of 2019, the Company recorded an income tax benefit of
The Company’s cash and investment balance totaled
Second Quarter and Full Year 2019 Outlook
The Company expects second quarter 2019 net revenues to range from
“As in prior years, we expect the Company’s financial performance will progress and grow from our solid first quarter driven by both our core infectious disease and molecular collection businesses. Our results also reflect performance by CoreBiome and Novosanis and the seasonality of certain parts of our business,” Dr. Tang said. “It should be clear from our second quarter and full-year guidance that we anticipate a very strong second half of the year, reflecting full-year growth in all of our core strategic product lines, when the effect of the large consumer genetics customer’s change in market strategy is excluded.”
Financial Data
Condensed Consolidated Financial Data
(In thousands, except per-share data) | Three Months Ended | ||||||
March 31, | |||||||
2019 | 2018 | ||||||
Results of Operations | |||||||
Net revenues | $ | 30,122 | $ | 41,987 | |||
Cost of products sold | 12,042 | 17,520 | |||||
Gross profit | 18,080 | 24,467 | |||||
Operating expenses: | |||||||
Research and development | 4,371 | 4,075 | |||||
Sales and marketing | 7,295 | 7,499 | |||||
General and administrative | 8,930 | 13,391 | |||||
Change in fair value of acquisition-related contingent consideration | 1,295 | — | |||||
Total operating expenses | 21,891 | 24,965 | |||||
Operating loss | (3,811 | ) | (498 | ) | |||
Other income | 524 | 412 | |||||
Loss before income taxes | (3,287 | ) | (86 | ) | |||
Income tax expense (benefit) | (29 | ) | 2,033 | ||||
Net loss | $ | (3,258 | ) | $ | (2,119 | ) | |
Loss per share: | |||||||
Basic | $ | (0.05 | ) | $ | (0.03 | ) | |
Diluted | $ | (0.05 | ) | $ | (0.03 | ) | |
Weighted average shares: | |||||||
Basic | 61,531 | 60,865 | |||||
Diluted | 61,531 | 60,865 | |||||
Three Months Ended March 31, | |||||||||||||||||||
Dollars | Percentage of Total Net Revenues | ||||||||||||||||||
2019 |
2018 |
% | 2019 |
2018 |
|||||||||||||||
Change | |||||||||||||||||||
Market | |||||||||||||||||||
Infectious disease testing | $ | 12,338 | $ | 14,170 | (13 | )% | 41 | % | 34 | % | |||||||||
Risk assessment testing | 2,836 | 3,002 | (6 | ) | 9 | 7 | |||||||||||||
Cryosurgical systems | 2,575 | 2,785 | (8 | ) | 9 | 6 | |||||||||||||
Molecular collection systems | 10,583 | 18,361 | (42 | ) | 35 | 44 | |||||||||||||
Net product and service revenues | 28,332 | 38,318 | (26 | ) | 94 | 91 | |||||||||||||
Royalty income | 1,084 | 1,602 | (32 | ) | 4 | 4 | |||||||||||||
Other | 706 | 2,067 | (66 | ) | 2 | 5 | |||||||||||||
Net revenues | $ | 30,122 | $ | 41,987 | (28 | )% | 100 | % | 100 | % | |||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2019 |
2018 |
% | |||||||||
Change | |||||||||||
OraQuick® Revenues | |||||||||||
Domestic HIV | $ | 4,304 | $ | 4,976 | (14 | )% | |||||
International HIV | 4,001 | 5,737 | (30 | ) | |||||||
Net HIV revenues | 8,305 | 10,713 | (22 | ) | |||||||
Domestic HCV | 1,828 | 1,627 | 12 | ||||||||
International HCV | 1,457 | 665 | 119 | ||||||||
Net HCV revenues | 3,285 | 2,292 | 43 | ||||||||
Net product revenues | $ | 11,590 | $ | 13,005 | (11 | )% | |||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2019 |
2018 |
% | |||||||||
Change | |||||||||||
Molecular Collection Systems Revenues | |||||||||||
Genomics | $ | 8,047 | $ | 17,088 | (53 | )% | |||||
Microbiome | 2,326 | 1,273 | 83 | ||||||||
Other | 210 | - | 100 | ||||||||
Net product and service revenues | 10,583 | $ | 18,361 | (42 | ) | ||||||
Royalty income | 1,084 | 1,602 | (32 | ) | |||||||
Other | 222 | - | 100 | ||||||||
Total Molecular Collection Systems Revenues | $ | 11,889 | $ | 19,963 | (40 | )% | |||||
Condensed Consolidated Balance Sheets (Unaudited)
March 31, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 69,516 | $ | 88,438 | |||
Short-term investments | 77,474 | 68,134 | |||||
Accounts receivable, net | 24,909 | 34,842 | |||||
Inventories | 26,213 | 22,888 | |||||
Other current assets | 7,226 | 5,010 | |||||
Property, plant and equipment, net | 25,970 | 24,299 | |||||
Right of use assets, net | 5,265 | - | |||||
Intangible assets, net | 12,929 | 5,137 | |||||
Goodwill | 28,903 | 18,521 | |||||
Long-term investments | 36,585 | 44,752 | |||||
Other non-current assets | 3,935 | 3,550 | |||||
Total assets | $ | 318,925 | $ | 315,571 | |||
Liabilities and Stockholders’ Equity | |||||||
Accounts payable | $ | 10,638 | $ | 10,598 | |||
Deferred revenue | 4,234 | 3,521 | |||||
Contingent consideration obligation | 3,638 | - | |||||
Other current liabilities | 8,798 | 13,861 | |||||
Long-term lease liabilities | 4,375 | - | |||||
Long-term contingent consideration obligation | 1,987 | - | |||||
Other non-current liabilities | 4,748 | 4,213 | |||||
Stockholders’ equity | 280,507 | 283,378 | |||||
Total liabilities and stockholders’ equity | $ | 318,925 | $ | 315,571 | |||
Three Months Ended | |||||||
March 31, | |||||||
Additional Financial Data (Unaudited) | 2019 | 2018 | |||||
Capital expenditures | $ | 2,628 | $ | 1,897 | |||
Depreciation and amortization | $ | 1,726 | $ | 1,868 | |||
Stock-based compensation | $ | 1,231 | $ | 7,483 | |||
Cash provided by operating activities | $ | 528 | $ | 7,636 |
Conference Call
The Company will host a conference call and audio webcast for analysts and investors to discuss the Company’s 2019 first quarter results, certain business developments and updated financial guidance, 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 #5270658 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,
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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 |