OraSure Announces Fourth Quarter and Full Year 2008 Financial Results
The Company recorded a net loss of
“We have recorded a full valuation allowance against our net deferred
tax asset, in accordance with GAAP, as a result of the continued
unprecedented volatility in the global economy and our expectation of a
loss for 2009,” said
For the year ended
For the quarter ended
“Despite the challenges we faced during 2008 and the current uncertain
economic climate, we are starting the new year on a positive note,” said
The Company’s gross margins were 58% and 56% for the year and quarter
ended
For the full year 2008, operating expenses increased to
Research and development costs increased in both the year and the
quarter ended
Sales and marketing expenses also increased for both the year and the
quarter ended
General and administrative expenses for the full year 2008 decreased as
a result of lower compensation costs, bank charges, consulting fees and
legal expenses. Fourth quarter 2008 general and administrative expenses
increased as a result of an accrual for costs associated with the
termination of the Company’s OraQuick® distribution agreement with
Cash, cash equivalents and short-term investments totaled
First Quarter 2009 Outlook
The Company expects total revenues for the first quarter of 2009 to
range from approximately
| Condensed Financial Data | ||||||||||||||||
| (In thousands, except per-share | ||||||||||||||||
| data and percentages) | ||||||||||||||||
|
Unaudited |
||||||||||||||||
|
Three months ended
December 31, |
Year ended
December 31, |
|||||||||||||||
|
2008 |
2007 |
2008 |
2007 |
|||||||||||||
| Results of Operations | ||||||||||||||||
| Revenues | $ | 17,209 | $ | 19,809 | $ | 71,104 | $ | 82,686 | ||||||||
| Cost of products sold | 7,583 | 8,281 | 29,976 | 32,403 | ||||||||||||
| Gross profit | 9,626 | 11,528 | 41,128 | 50,283 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 5,392 | 4,240 | 20,255 | 14,136 | ||||||||||||
| Sales and marketing | 5,411 | 5,063 | 20,917 | 20,062 | ||||||||||||
| General and administrative | 4,994 | 3,668 | 16,287 | 17,304 | ||||||||||||
| Total operating expenses | 15,797 | 12,971 | 57,459 | 51,502 | ||||||||||||
| Operating loss | (6,171 | ) | (1,443 | ) | (16,331 | ) | (1,219 | ) | ||||||||
| Other income, net | 506 | 1,070 | 7,583 | 5,513 | ||||||||||||
| Pre-tax income (loss) | (5,665 | ) | (373 | ) | (8,748 | ) | 4,294 | |||||||||
| Income tax provision (benefit) | 23,607 | (400 | ) | 22,527 | 1,821 | |||||||||||
| Net income (loss) | $ | (29,272 | ) | $ | 27 | $ | (31,275 | ) | $ | 2,473 | ||||||
| Earnings (loss) per share | ||||||||||||||||
| Basic and Diluted | $ | (0.64 | ) | $ | — | $ | (0.67 | ) | $ | 0.05 | ||||||
| Weighted average shares: | ||||||||||||||||
| Basic | 45,882 | 46,625 | 46,550 | 46,325 | ||||||||||||
| Diluted | 45,882 | 47,336 | 46,550 | 46,878 | ||||||||||||
Non-GAAP Financial Measures
The Company’s management considers the use of non-GAAP financial
measures helpful in assessing the Company’s current periods’ financial
performance, especially in comparison to the same periods of the prior
year. As such, the Company has presented non-GAAP net income (loss) and
non-GAAP basic and diluted earnings (loss) per share in the table below.
While the Company believes that disclosing the following non-GAAP
financial measures allows for greater transparency in the review of its
underlying financial performance, it does not consider such measures to
be substitutes for, or superior to, net income (loss) or basic and
diluted earnings (loss) per share as determined in accordance with GAAP.
For purposes of calculating the non-GAAP net loss and non-GAAP basic and
diluted loss per share for the current periods, the Company excluded the
The following table reconciles the GAAP net income (loss) and GAAP basic and diluted earnings (loss) per share to the non-GAAP net income (loss) and non-GAAP basic and diluted earnings (loss) per share for the periods indicated.
|
Three months ended
December 31, |
Year ended
December 31, |
|||||||||||||
|
2008 |
2007 |
2008 |
2007 |
|||||||||||
| Net income (loss), as reported under GAAP | $ | (29,272 | ) | $ | 27 | $ | (31,275 | ) | $ | 2,473 | ||||
| Tax adjustment | 25,978 | − | 25,978 | − | ||||||||||
| Net income (loss), non-GAAP | $ | (3,294 | ) | $ | 27 | $ | (5,297 | ) | $ | 2,473 | ||||
| Earnings (loss) per share: | ||||||||||||||
| Basic and Diluted, as reported under GAAP | $ | (0.64 | ) | $ | − | $ | (0.67 | ) | $ | 0.05 | ||||
| Tax adjustment | 0.57 | − | 0.56 | − | ||||||||||
| Basic and Diluted, non-GAAP | $ | (0.07 | ) | $ | − | $ | (0.11 | ) | $ | 0.05 | ||||
| Weighted average shares: | ||||||||||||||
| Basic | 45,882 | 46,625 | 46,550 | 46,325 | ||||||||||
| Diluted | 45,882 | 47,336 | 46,550 | 46,878 | ||||||||||
|
|
Three months ended December 31, |
||||||||||||||
| Percentage of | |||||||||||||||
| Dollars | % | Total Revenues | |||||||||||||
| Market Revenues | 2008 | 2007 | Change | 2008 | 2007 | ||||||||||
| Infectious disease testing | $ | 8,837 | $ | 9,444 | (6 | )% | 51 | % | 48 | % | |||||
| Substance abuse testing | 3,452 | 3,390 | 2 | 20 | 17 | ||||||||||
| Cryosurgical systems | 2,928 | 5,343 | (45 | ) | 17 | 27 | |||||||||
| Insurance risk assessment | 1,690 | 1,605 | 5 | 10 | 8 | ||||||||||
| Product revenues | 16,907 | 19,782 | (15 | ) | 98 | 100 | |||||||||
| Licensing and product development | 302 | 27 | 1,019 | 2 | — | ||||||||||
| Total revenues | $ | 17,209 | $ | 19,809 | (13 | )% | 100 | % | 100 | % | |||||
|
|
Year ended December 31, | ||||||||||||||
| Percentage of | |||||||||||||||
| Dollars | % | Total Revenues | |||||||||||||
| Market Revenues | 2008 | 2007 | Change | 2008 | 2007 | ||||||||||
| Infectious disease testing | $ | 38,096 | $ | 35,791 | 6 | % | 54 | % | 43 | % | |||||
| Substance abuse testing | 14,006 | 15,789 | (11 | ) | 20 | 19 | |||||||||
| Cryosurgical systems | 10,655 | 23,533 | (55 | ) | 15 | 28 | |||||||||
| Insurance risk assessment | 6,085 | 5,464 | 11 | 8 | 7 | ||||||||||
| Product revenues | 68,842 | 80,577 | (15 | ) | 97 | 97 | |||||||||
| Licensing and product development | 2,262 | 2,109 | 7 | 3 | 3 | ||||||||||
| Total revenues | $ | 71,104 | $ | 82,686 | (14 | )% | 100 | % | 100 | % | |||||
| Three months ended | Year ended | |||||||||||||||||
| December 31, | % | December 31, | % | |||||||||||||||
| OraQuick® Revenues | 2008 | 2007 | Change | 2008 | 2007 | Change | ||||||||||||
| Direct to U.S. Public Health | $ | 6,177 | $ | 5,460 | 13 | % | $ | 25,438 | $ | 19,799 | 28 | % | ||||||
| Abbott | 1,137 | 2,018 | (44 | ) | 6,625 | 8,102 | (18 | ) | ||||||||||
| International | 930 | 1,181 | (21 | ) | 3,234 | 3,291 | (2 | ) | ||||||||||
| SAMHSA/ CDC | — | — | — | 12 | 1,464 | (99 | ) | |||||||||||
| Total OraQuick® revenues | $ | 8,244 | $ | 8,659 | (5 | )% | $ | 35,309 | $ | 32,656 | 8 | % | ||||||
| Three months ended | Year ended | |||||||||||||||||
| December 31, | % | December 31, | % | |||||||||||||||
| Intercept® Revenues | 2008 | 2007 | Change | 2008 | 2007 | Change | ||||||||||||
| Workplace testing | $ | 1,270 | $ | 1,282 | (1 | )% | $ | 4,750 | $ | 6,650 | (29 | )% | ||||||
| Criminal justice | 698 | 622 | 12 | 2,663 | 2,570 | 4 | ||||||||||||
| International | 598 | 431 | 39 | 2,168 | 2,188 | (1 | ) | |||||||||||
| Direct | 299 | 264 | 13 | 1,204 | 1,003 | 20 | ||||||||||||
| Total Intercept® revenues | $ | 2,865 | $ | 2,599 | 10 | % | $ | 10,785 | $ | 12,411 | (13 | )% | ||||||
| Three months ended | Year ended | |||||||||||||||||
| December 31, | % | December 31, | % | |||||||||||||||
| Cryosurgery Revenues | 2008 | 2007 | Change | 2008 | 2007 | Change | ||||||||||||
| Professional domestic | $ | 970 | $ | 1,806 | (46 | )% | $ | 3,911 | $ | 5,247 | (25 | )% | ||||||
| Professional international | 725 | 798 | (9 | ) | 2,529 | 2,349 | 8 | |||||||||||
| OTC domestic | — | 650 | (100 | ) | — | 6,237 | (100 | ) | ||||||||||
| OTC international | 1,233 | 2,089 | (41 | ) | 4,215 | 9,700 | (57 | ) | ||||||||||
| Total cryosurgery revenues | $ | 2,928 | $ | 5,343 | (45 | )% | $ | 10,655 | $ | 23,533 | (55 | )% | ||||||
| Balance Sheets | December 31, 2008 | December 31, 2007 | ||||
|
Assets |
||||||
|
Cash, cash equivalents and short-term
investments |
$ | 82,523 | $ | 95,566 | ||
| Accounts receivable, net | 11,571 | 11,296 | ||||
| Inventories | 10,704 | 9,410 | ||||
| Current deferred income taxes | − | 5,061 | ||||
| Other current assets | 1,418 | 2,455 | ||||
| Property and equipment, net | 21,235 | 20,911 | ||||
| Deferred income taxes | − | 17,266 | ||||
| Other non-current assets | 4,467 | 5,387 | ||||
| Total assets | $ | 131,918 | $ | 167,352 | ||
|
Liabilities and Stockholders’ Equity |
||||||
| Current portion of long-term debt | $ | 558 | $ | 557 | ||
| Accounts payable | 3,926 | 5,616 | ||||
| Accrued expenses | 10,796 | 11,996 | ||||
| Long-term debt | 8,301 | 8,818 | ||||
| Other liabilities | 12 | 311 | ||||
| Stockholders’ equity | 108,325 | 140,054 | ||||
| Total liabilities and stockholders’ equity | $ | 131,918 | $ | 167,352 | ||
| Year ended December 31, | |||||||
| Additional Financial Data | 2008 | 2007 | |||||
| Capital expenditures | $ | 2,643 | $ | 5,504 | |||
| Depreciation and amortization | $ | 3,177 | $ | 2,736 | |||
| Purchase and retirement of common stock | $ | 5,121 | − | ||||
| Cash flows from operating activities | $ | (2,670 | ) | $ | 11,584 | ||
|
Accounts receivable – days sales outstanding |
60 days | 50 days | |||||
Conference Call
The Company will host a conference call and audio webcast to discuss the
Company’s 2008 fourth quarter and full-year financial results, business
developments and first quarter 2009 financial guidance, beginning today
at
In order to listen to the conference call, please either dial
888-742-2024 (Domestic) or 706-643-0033 (International) and reference
Conference ID #83800004, or go to
About
Important Information
This press release contains certain forward-looking statements,
including with respect to revenues, expenses, net income, earnings/loss
per share and products. Actual results could be significantly different.
Factors that could affect results include the ability to market and sell
products, whether through an internal, direct sales force or third
parties; changes in relationships, including disputes or disagreements,
with strategic partners and reliance on strategic partners for the
performance of critical activities under collaborative arrangements;
failure of distributors or other customers to meet purchase forecasts or
minimum purchase requirements for the Company’s products; impact of
replacing distributors and success of direct sales efforts; inventory
levels at distributors and other customers; impact of competitors,
competing products and technology changes; ability to develop,
commercialize and market new products; market acceptance of oral fluid
testing or other products; changes in market acceptance of products
based on product performance and extended shelf life; continued bulk
purchases by customers, including governmental agencies, and the ability
to fully deploy those purchases in a timely manner; 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 product components;
availability of related products produced by third parties or products
required for use of our products; 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; history of losses and ability
to achieve sustained profitability and ability to utilize net operating
loss carryforwards 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 changes in international funding
sources; loss or impairment of sources of capital; ability to meet
financial covenants in agreements with financial institutions; ability
to retain qualified personnel; exposure to patent infringement, 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 and civil
unrest; ability to identify, complete and realize the full benefits of
potential acquisitions; and general political, business and economic
conditions. These and other factors are discussed more fully in the
1 GAAP is defined as U.S. Generally Accepted Accounting Principles
Source:
OraSure Technologies, Inc.
Ronald H. Spair
Chief
Financial Officer
610-882-1820
Investorinfo@orasure.com
www.orasure.com
