OraSure Announces 2018 Second Quarter Financial Results
Financial Highlights
- Consolidated net revenues for the second quarter of 2018 were
$43.6 million , a 9% increase from the second quarter of 2017. Consolidated net product revenues were$38.8 million , representing a 1% decrease from the second quarter of 2017. - Consolidated net revenues for the six months ended
June 30, 2018 were$85.6 million , an 18% increase from the comparable period of 2017. Consolidated net product revenues for the first six months of 2018 were$77.1 million , representing a 9% increase over the first half of 2017. - Net molecular collection systems revenues were
$17.2 million during the second quarter of 2018, which represents a 7% increase over the second quarter of 2017. Net molecular collection systems revenues during the six months endedJune 30, 2018 were$35.6 million , a 33% increase from the comparable period of 2017. - International sales of the Company’s OraQuick® HIV products of
$7.4 million increased 265% compared to the second quarter of 2017. International sales of the Company’s OraQuick® HIV products of$13.1 million increased 180% compared to the first six 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
$1.5 million decreased 72% for the second quarter of 2018 compared to the second quarter of 2017. International sales of the Company’s OraQuick® HCV product of$2.1 million for the first six months of 2018 decreased 78% from the comparable period of 2017. These declines were a 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$4.1 million of sales during the second quarter of 2017 and$6.9 million during the first six months of 2017. - Consolidated net income for the second quarter of 2018 was
$4.1 million , or$0.07 per share on a fully diluted basis, which compares to consolidated net income of$5.4 million , or$0.09 per share on a fully diluted basis, for the second quarter of 2017. Consolidated net income for the six months endedJune 30, 2018 was$2.0 million , or$0.03 per share on a fully diluted basis, which compares to consolidated net income of$17.9 million , or$0.30 per share on a fully diluted basis, for the comparable period of 2017. Consolidated net income for the current quarter and year to date period included$2.2 million and$8.6 million , respectively, of transition costs associated with the retirement of the Company’s Chief Executive Officer and Chief Financial Officer and the hiring of their successors. These transition costs approximated$0.04 and$0.14 per share, respectively, for the three and six month periods endedJune 30, 2018 , and primarily consisted of non-cash stock compensation charges. Consolidated net income for the six months endedJune 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$0.16 per share on a fully diluted after-tax basis in that period. - Cash and investments totaled
$181.2 million at June 30, 2018.
“Our financial results for the second quarter of 2018 exceeded expectations and continued the solid performance started in Q1,” said Dr.
Financial Results
Consolidated net product revenues for the second quarter of 2018 decreased 1% from the comparable period of 2017, primarily as a result of lower sales of the Company’s OraQuick® HCV and cryosurgical systems products and lower domestic sales of the professional OraQuick® HIV test, partially offset by higher international sales of the OraQuick® HIV Self-Test and higher sales of the Company’s molecular collections products.
Consolidated net product revenues for the first six months of 2018 increased 9% 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 six months ended
Consolidated other revenues were
Consolidated gross profit percentage was 59% for the three and six months ended
Consolidated operating expenses increased to
The Company reported operating income of
Income tax expense was
The Company’s cash and investment balance totaled
Third Quarter 2018 Outlook
The Company expects consolidated net revenues to range from
Financial Data
Condensed Consolidated Financial Data
(In thousands, except per-share data)
Unaudited
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Results of Operations | |||||||||||||||||
Net revenues | $ | 43,625 | $ | 40,176 | $ | 85,612 | $ | 72,722 | |||||||||
Cost of products sold | 17,730 | 14,699 | 35,250 | 26,935 | |||||||||||||
Gross profit | 25,895 | 25,477 | 50,362 | 45,787 | |||||||||||||
Operating expenses: | |||||||||||||||||
Research and development | 4,261 | 3,338 | 8,336 | 6,308 | |||||||||||||
Sales and marketing | 7,429 | 7,502 | 14,928 | 14,379 | |||||||||||||
General and administrative | 8,647 | 7,750 | 22,038 | 14,842 | |||||||||||||
Gain on litigation settlement | — | — | — | (12,500 | ) | ||||||||||||
Total operating expenses | 20,337 | 18,590 | 45,302 | 23,029 | |||||||||||||
Operating income | 5,558 | 6,887 | 5,060 | 22,758 | |||||||||||||
Other income | 736 | 96 | 1,148 | 563 | |||||||||||||
Income before income taxes | 6,294 | 6,983 | 6,208 | 23,321 | |||||||||||||
Income tax expense | 2,173 | 1,555 | 4,206 | 5,452 | |||||||||||||
Net income | $ | 4,121 | $ | 5,428 | $ | 2,002 | $ | 17,869 | |||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.07 | $ | 0.09 | $ | 0.03 | $ | 0.31 | |||||||||
Diluted | $ | 0.07 | $ | 0.09 | $ | 0.03 | $ | 0.30 | |||||||||
Weighted average shares: | |||||||||||||||||
Basic | 61,100 | 58,478 | 60,983 | 57,708 | |||||||||||||
Diluted | 62,244 | 60,728 | 62,379 | 59,755 | |||||||||||||
Summary of Net Revenues by Market and Product (Unaudited)
Three Months Ended June 30, | |||||||||||||||||||||||
Dollars | Percentage of Total Net Revenues |
||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | |||||||||||||||||||
Market | |||||||||||||||||||||||
Infectious disease testing | $ | 15,919 | $ | 16,663 | (4 | ) | % | 36 | % | 41 | % | ||||||||||||
Risk assessment testing | 3,315 | 3,238 | 2 | 8 | 8 | ||||||||||||||||||
Cryosurgical systems | 2,392 | 3,174 | (25 | ) | 6 | 8 | |||||||||||||||||
Molecular collection systems | 17,192 | 16,057 | 7 | 39 | 40 | ||||||||||||||||||
Net product revenues | 38,818 | 39,132 | (1 | ) | 89 | 97 | |||||||||||||||||
Other | 4,807 | 1,044 | 360 | 11 | 3 | ||||||||||||||||||
Net revenues | $ | 43,625 | $ | 40,176 | 9 | % | 100 | % | 100 | % | |||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||
Dollars | Percentage of Total Net Revenues |
||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | |||||||||||||||||||
Market | |||||||||||||||||||||||
Infectious disease testing | $ | 30,090 | $ | 31,245 | (4 | ) | % | 35 | % | 43 | % | ||||||||||||
Risk assessment testing | 6,316 | 6,368 | (1 | ) | 7 | 9 | |||||||||||||||||
Cryosurgical systems | 5,177 | 6,237 | (17 | ) | 6 | 8 | |||||||||||||||||
Molecular collection systems | 35,553 | 26,764 | 33 | 42 | 37 | ||||||||||||||||||
Net product revenues | 77,136 | 70,614 | 9 | 90 | 97 | ||||||||||||||||||
Other | 8,476 | 2,108 | 302 | 10 | 3 | ||||||||||||||||||
Net revenues | $ | 85,612 | $ | 72,722 | 18 | % | 100 | % | 100 | % | |||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | % Change |
|||||||||||||||||||||
OraQuick® Revenues | ||||||||||||||||||||||||||
Domestic HIV | $ | 3,881 | $ | 4,965 | (22 | ) | % | $ | 7,293 | $ | 8,779 | (17 | ) | % | ||||||||||||
International HIV | 7,397 | 2,025 | 265 | 13,067 | 4,669 | 180 | ||||||||||||||||||||
Domestic OTC HIV | 1,308 | 1,894 | (31 | ) | 2,941 | 3,436 | (14 | ) | ||||||||||||||||||
Net HIV revenues | 12,586 | 8,884 | 42 | 23,301 | 16,884 | 38 | ||||||||||||||||||||
Domestic HCV | 1,730 | 2,382 | (27 | ) | 3,358 | 4,091 | (18 | ) | ||||||||||||||||||
International HCV | 1,473 | 5,261 | (72 | ) | 2,138 | 9,664 | (78 | ) | ||||||||||||||||||
Net HCV revenues | 3,203 | 7,643 | (58 | ) | 5,496 | 13,755 | (60 | ) | ||||||||||||||||||
Net product revenues | $ | 15,789 | $ | 16,527 | (4 | ) | % | $ | 28,797 | $ | 30,639 | (6 | ) | % | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | % Change |
|||||||||||||||||||||
Cryosurgical Systems Revenues | ||||||||||||||||||||||||||
Domestic professional | $ | 1,068 | $ | 1,445 | (26 | ) | % | $ | 1,943 | $ | 2,941 | (34 | ) | % | ||||||||||||
International professional | 264 | 243 | 9 | 413 | 373 | 11 | ||||||||||||||||||||
Domestic OTC | 295 | 347 | (15 | ) | 584 | 632 | (8 | ) | ||||||||||||||||||
International OTC | 765 | 1,139 | (33 | ) | 2,237 | 2,291 | (2 | ) | ||||||||||||||||||
Net product revenues | $ | 2,392 | $ | 3,174 | (25 | ) | % | $ | 5,177 | $ | 6,237 | (17 | ) | % | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | % Change |
|||||||||||||||||||||
Molecular Collection Systems Revenues | ||||||||||||||||||||||||||
Commercial Genomics | $ | 12,263 | $ | 12,815 | (4 | ) | % | $ | 26,519 | $ | 20,072 | 32 | % | |||||||||||||
Academic Genomics | 3,105 | 2,399 | 29 | 5,937 | 5,083 | 17 | ||||||||||||||||||||
Microbiome | 1,824 | 843 | 116 | 3,097 | 1,609 | 92 | ||||||||||||||||||||
Net product revenues | $ | 17,192 | $ | 16,057 | 7 | % | $ | 35,553 | $ | 26,764 | 33 | % | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2018 | 2017 | % Change |
2018 | 2017 | % Change |
|||||||||||||||||||||
Other Revenues | ||||||||||||||||||||||||||
Royalty income | $ | 2,092 | $ | — | N/A | $ | 3,694 | $ | — | N/A | ||||||||||||||||
BARDA funding | 1,920 | 1,044 | 84 | % | 3,458 | 2,108 | 64 | % | ||||||||||||||||||
Charitable support reimbursement | 795 | — | N/A | 1,324 | — | N/A | ||||||||||||||||||||
Other revenues | $ | 4,807 | $ | 1,044 | 360 | % | $ | 8,476 | $ | 2,108 | 302 | % | ||||||||||||||
Condensed Consolidated Balance Sheets (Unaudited)
June 30, 2018 | December 31, 2017 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 71,069 | $ | 72,869 | ||||
Short-term investments | 74,269 | 83,028 | ||||||
Accounts receivable, net | 31,648 | 42,521 | ||||||
Inventories | 20,599 | 19,343 | ||||||
Other current assets | 4,637 | 4,144 | ||||||
Property and equipment, net | 23,946 | 21,372 | ||||||
Intangible assets, net | 6,622 | 8,223 | ||||||
Goodwill | 19,231 | 20,083 | ||||||
Long-term investments | 35,828 | 20,690 | ||||||
Other non-current assets | 4,513 | 3,928 | ||||||
Total assets | $ | 292,362 | $ | 296,201 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accounts payable | $ | 9,659 | $ | 10,228 | ||||
Deferred revenue | 1,621 | 1,314 | ||||||
Other current liabilities | 9,837 | 20,695 | ||||||
Other non-current liabilities | 4,474 | 3,932 | ||||||
Deferred income taxes | 1,600 | 1,951 | ||||||
Stockholders’ equity | 265,171 | 258,081 | ||||||
Total liabilities and stockholders’ equity | $ | 292,362 | $ | 296,201 | ||||
Six Months Ended | ||||||||
June 30, | ||||||||
Additional Financial Data (Unaudited) | 2018 | 2017 | ||||||
Capital expenditures | $ | 4,484 | $ | 1,567 | ||||
Depreciation and amortization | $ | 3,746 | $ | 2,891 | ||||
Stock-based compensation | $ | 11,262 | $ | 3,631 | ||||
Cash provided by operating activities | $ | 13,928 | $ | 21,704 | ||||
Conference Call
The Company will host a conference call and audio webcast for analysts and investors to discuss the Company’s 2018 second quarter financial results, certain business developments and financial guidance for the third 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 #4795505 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