OraSure Technologies Inc--Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


FORM 8-K

 


CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 8, 2007

 


OraSure Technologies, Inc.

(Exact Name of Registrant as Specified in Charter)

 


 

Delaware   001-16537   36-4370966

(State or Other Jurisdiction

of Incorporation)

  (Commission File Number)  

(I.R.S. Employer

Identification No.)

 

220 East First Street

Bethlehem, Pennsylvania

  18015-1360
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: 610-882-1820

 


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 



Item 2.02 – Results of Operations and Financial Condition.

On May 8, 2007, OraSure Technologies, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2007 and providing an update on financial guidance for the second quarter and full year 2007. A copy of the press release is attached as Exhibit 99 to this Form 8-K and is incorporated herein by reference.

Item 9.01 – Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
Number

  

Description

99

   Press Release, dated May 8, 2007, announcing financial results of OraSure Technologies, Inc. for the quarter ended March 31, 2007 and providing an update on financial guidance for the second quarter and full year 2007.


Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

    ORASURE TECHNOLOGIES, INC.
Date: May 8, 2007   By:  

/s/ Jack E. Jerrett

    Jack E. Jerrett
    Senior Vice President, General Counsel and Secretary


Index to Exhibits

 

Exhibit No.

  

Description

99

   Press Release, dated May 8, 2007, announcing financial results of OraSure Technologies, Inc. for the quarter ended March 31, 2007 and providing an update on financial guidance for the second quarter and full year 2007.
Press Release
LOGO    Exhibit 99

Company Contact:

 

Ronald H. Spair
Chief Financial Officer
610-882-1820
Investorinfo@orasure.com
www.orasure.com

OraSure Technologies Announces 2007 First Quarter Results

Record Quarterly Revenues Led by OraQuick ADVANCE® Sales

BETHLEHEM, PA – May 8, 2007 – (BW HealthWire) – OraSure Technologies, Inc. (NASDAQ:OSUR), a market leader in oral fluid diagnostics, today announced record quarterly revenues of $20.1 million for the three months ended March 31, 2007, compared to $15.2 million in revenues recorded for the three months ended March 31, 2006. Increased sales of the Company’s OraQuick ADVANCE® rapid HIV-1/2 antibody test, substance abuse testing products and cryosurgery products, together with an increase in funded research and development related to the Company’s rapid Hepatitis C (“HCV”) test, contributed to the 32% increase in total revenues during the first quarter.

The Company’s net income increased 65% to $1,487,000, or $0.03 per share on a fully-diluted basis, for the first quarter of 2007 compared to net income of $900,000, or $0.02 per share on a fully-diluted basis, during the first quarter of 2006. The 2007 results include a gain from the sale of the Company’s equity interest in a foreign distributor.

Gross margin in the first quarter of 2007 was 62% compared with 63% in the first quarter of 2006. Gross margin was affected by increased product support costs, offset by the benefit derived from increased licensing and product development revenue.

Operating expenses for the first quarter of 2007 increased $3.2 million to $11.9 million, from $8.7 million in the comparable period in 2006. This increase was primarily attributable to higher research and development costs associated with the product development and clinical work for an OraQuick ADVANCE® HIV test for home use and an OraQuick® HCV test for professional use, higher staffing related expenses and additional consulting expenses related to the successful implementation of the Company’s new enterprise resource planning system.

“Our business performed very well during the first quarter, and this outstanding performance provides a great start for the year,” said Douglas A. Michels, President and Chief Executive Officer of OraSure Technologies. “We are particularly pleased with the continued strong performance of our infectious disease and substance abuse testing businesses and the increase in cryosurgical systems revenues. During the quarter, we also made very good progress on several of our most important strategic initiatives, including the ongoing development of our over-the-counter OraQuick® HIV test and an OraQuick® HCV test for professional use. We continue to believe 2007 will be a very successful year and we are creating a solid foundation for the future.”


Cash, cash equivalents and short-term investments were $86.5 million and working capital was $100.2 million at March 31, 2007, compared to $91.0 million and $96.0 million, respectively, at December 31, 2006. The decrease in cash, cash equivalents and short-term investments is primarily the result of the Company’s $4.0 million payment for patents and licenses during the current quarter.

Cash flow used in operating activities was $1.0 million in the first quarter of 2007 compared to $2.6 million of cash flow provided by operating activities in the first quarter of 2006.

Financial Guidance

Based on the Company’s performance in the first quarter and the recent receipt of an additional order for approximately $1.0 million from Prestige Brands for delivery of over-the-counter (“OTC”) cryosurgery product in the second quarter of 2007, the Company expects revenues to approximate $20.0 million in the second quarter and $81.0 million for the full year. Fully diluted earnings per share are expected to range from breakeven to $0.01 per share in the second quarter and from $0.03 to $0.05 per share for the full year.

 

(In thousands, except per share data and percentages)
     Three months ended
March 31,
     2007    2006
     (Unaudited)

Results of Operations

     

Revenues

   $ 20,109    $ 15,217

Cost of products sold

     7,584      5,618
             

Gross profit

     12,525      9,599
             

Operating expenses:

     

Research and development

     2,920      1,649

Sales and marketing

     4,771      4,106

General and administrative

     4,237      2,958
             

Total operating expenses

     11,928      8,713
             

Operating income

     597      886

Other income, net

     2,389      791
             

Pre-tax income

     2,986      1,677

Income tax provision

     1,499      777
             

Net income

   $ 1,487    $ 900
             

Earnings per share

     

Basic

   $ 0.03    $ 0.02
             

Diluted

   $ 0.03    $ 0.02
             

Weighted average shares:

     

Basic

     46,114      45,840
             

Diluted

     46,554      46,833
             


     Three months ended
March 31,
      
Market Revenues    2007    2006   

%

Change

 

Infectious disease testing

   $ 8,932    $ 6,142    45 %

Substance abuse testing

     3,929      3,442    14  

Cryosurgical systems

     5,680      4,458    27  

Insurance risk assessment

     889      1,086    (18 )
                

Product revenues

     19,430      15,128    28  

Licensing and product development

     679      89    663  
                

Total revenues

   $ 20,109    $ 15,217    32 %
                
     Three months ended
March 31,
      
OraQuick® Revenues    2007    2006   

%

Change

 

Direct to U.S. Public Health

   $ 4,342    $ 2,897    50 %

Abbott

     2,151      1,482    45  

SAMHSA

     329      256    29  

CDC

     620      0    N/A  

International

     747      561    33  
                

Total OraQuick® revenues

   $ 8,189    $ 5,196    58 %
                
     Three months ended
March 31,
      
Intercept® Revenues    2007    2006   

%

Change

 

Workplace testing

   $ 1,545    $ 1,280    21 %

Criminal Justice

     645      534    21  

International

     600      557    8  

Direct

     202      137    47  
                

Total Intercept® revenues

   $ 2,992    $ 2,508    19 %
                
     Three months ended
March 31,
      
Cryosurgery Revenues    2007    2006   

%

Change

 

Professional domestic

   $ 1,053    $ 1,089    (3 )%

Professional international

     467      370    26  

OTC domestic

     2,150      1,819    18  

OTC international

     2,010      1,180    70  
                

Total cryosurgery revenues

   $ 5,680    $ 4,458    27 %
                


Balance Sheets    March 31, 2007    December 31, 2006
     (Unaudited)

Assets

     

Cash, cash equivalents and short-term

investments

   $ 86,542    $ 91,001

Accounts receivable, net

     14,844      10,357

Inventories

     6,089      5,535

Deferred income taxes

     4,269      3,676

Other current assets

     1,936      1,990

Property and equipment, net

     18,004      17,375

Deferred income taxes

     18,276      19,845

Other non-current assets

     6,184      6,786
             

Total assets

   $ 156,144    $ 156,565
             

Liabilities and Stockholders’ Equity

     

Current portion of long-term debt

   $ 597    $ 609

Accounts payable

     4,176      3,312

Accrued expenses

     8,722      12,659

Long-term debt

     10,007      10,030

Other liabilities

     525      451

Stockholders’ equity

     132,117      129,504
             

Total liabilities and stockholders’ equity

   $ 156,144    $ 156,565
             
     Three Months Ended March 31,
Additional Financial Data    2007    2006

Capital expenditures

   $ 898    $ 665

Depreciation and amortization

   $ 656    $ 447

Accounts receivable – days sales outstanding

     66 days      58 days

Conference Call

The Company will host a conference call and audio webcast today to discuss the Company’s 2007 first quarter financial results, business developments and the Company’s 2007 outlook, beginning at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). On the call will be Douglas A. Michels, President and Chief Executive Officer, and Ronald H. Spair, Chief Operating Officer and Chief Financial Officer. The call will include remarks by management and a question and answer session.

In order to listen to the conference call, please dial 888-742-2024 (Domestic) or 706-643-0033 (International) and reference 5389843 or go to OraSure Technologies’ web site, www.orasure.com, and click on the Investor Info link. 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 May 15, 2007, by dialing 800-642-1687 (Domestic) or 706-645-9291 (International) and entering the Conference ID #5389843.

About OraSure Technologies

OraSure Technologies develops, manufactures and markets oral fluid specimen collection devices and tests and other diagnostic products using its proprietary technologies, including immunoassays and other in vitro diagnostic tests and other medical devices. These products are sold in the United States and certain foreign countries to clinical laboratories, hospitals, clinics, community-based organizations and other public health organizations, distributors, government agencies, physicians’ offices, and commercial and industrial entities. For more information on the Company, please visit www.orasure.com.


Important Information

This press release contains certain forward-looking statements, including with respect to revenues, net income and products. Actual results could be significantly different. Factors that could affect results include the ability to market and sell products; 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 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; 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; volatility of our 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; loss or impairment of sources of capital; ability to meet financial covenants in agreements with financial institutions; ability to retain qualified personnel; exposure to product liability, patent infringement, 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 complete consolidation or restructuring activities; 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 Securities and Exchange Commission (“SEC”) filings of OraSure Technologies, including its registration statements, its Annual Report on Form 10-K for the year ended December 31, 2006, its Quarterly Reports on Form 10-Q, and its other filings with the SEC. Although forward-looking statements help to provide complete information about future prospects, readers should keep in mind that forward-looking statements may not be reliable. The forward-looking statements are made as of the date of this press release and OraSure Technologies undertakes no duty to update these statements.

# # #