OraSure Announces 2019 Second Quarter Financial Results
“Second quarter revenues were not what we had targeted due to a three-day delayed shipment of HIV Self-Tests and ongoing softness in the consumer genomics markets. However, our earnings were strong and we continue to expect to deliver on and exceed our original profit targets for the year notwithstanding market headwinds,” said
Financial and Business Highlights
- Net revenues for the second quarter of 2019 were
$38.8 million , an 11% decrease from the second quarter of 2018. Net product revenues were$37.3 million , representing a 4% decrease from the second quarter of 2018. - Net revenues for the six months ended
June 30, 2019 were$68.9 million , a 19% decrease from the comparable period of 2018. Net product revenues were$65.6 million , representing a 15% decrease from the first half of 2018. - Molecular collection systems revenues including royalty income and other revenues were
$18.5 million during the second quarter of 2019, a decline of 4% from the second quarter of 2018. Molecular collection systems revenues including royalty income and other revenues were$30.3 million during the first half of 2019, a decline of 23% from the same period in the prior year. - Molecular collection systems product and service revenues were
$17.3 million and$27.9 million during the second quarter and first half of 2019, respectively, which represents a 1% increase from the second quarter of 2018 and a 22% decrease from the first six months of 2018. - Domestic and international sales of the Company’s OraQuick® HIV products of
$9.9 million in the second quarter of 2019 decreased 21% compared to the second quarter of 2018. Domestic and international sales of the Company’s OraQuick® HIV products for the six months endedJune 30, 2019 of$18.2 million decreased 22% compared to the comparable period of the prior year. - Domestic sales of the Company’s OraQuick® HCV product of
$2.1 million increased 22% over the second quarter of 2018. OraQuick® HCV domestic sales for the six months endedJune 30, 2019 were$3.9 million , a 17% increase from the comparable period of 2018. - International sales of the Company’s OraQuick® HCV product of
$1.0 million decreased 33% for the second quarter of 2019 compared to the second quarter of 2018. OraQuick® HCV international sales for the six months endedJune 30, 2019 were$2.4 million , a 14% increase from the comparable period of 2018. - Net income for the second quarter of 2019 was
$4.4 million , or$0.07 per share on a fully-diluted basis, which compares to net income of$4.1 million , or$0.07 per share on a fully-diluted basis, for the second quarter of 2018. Net income for the six months endedJune 30, 2019 was$1.1 million , or$0.02 per share on a fully-diluted basis, which compares to net income of$2.0 million , or$0.03 per share on a fully-diluted basis, for the comparable period of 2018. Net income for the current three and six month periods included acquisition-related charges of$249,000 and$1.5 million , respectively, representing the change in fair value of contingent consideration associated with two recent acquisitions. The current six month period also included$597,000 of transaction costs. These acquisition-related charges were negligible for the current quarter on a per share basis and approximated$0.03 per share for the first six months of 2019. Net income for the second quarter and first six months of 2018 included$2.2 million and$8.6 million , respectively, of transition costs associated with executive management changes which occurred in 2018. These transition costs approximated$0.04 and$0.14 per share, respectively, for the second quarter and first six months of 2018, and primarily consisted of non-cash stock compensation charges. - Cash and investments totaled
$186.6 million atJune 30, 2019 .
Financial Results
Net product revenues for the second quarter of 2019 decreased 4% from the comparable period of 2018, primarily as a result of lower sales of the Company’s OraQuick® HIV and genomics products and lower international sales of the Company’s OraQuick® HCV test, partially offset by higher sales of the Company’s microbiome, cryosurgical, and domestic HCV products.
Net product revenues for the first six months of 2019 decreased 15% from the comparable period of 2018, primarily as a result of lower sales of the Company’s genomics and OraQuick® HIV products, partially offset by increases in microbiome, cryosurgical systems, and OraQuick® HCV 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 64% and 63% for the three and six months ended
For the three months ended
The Company reported operating income of
During the second quarter of 2019, the Company recorded income tax expense of
The Company’s cash and investment balance totaled
Third Quarter and Updated Full-Year 2019 Guidance
The Company expects third quarter 2019 net revenues to range from
Financial Data | ||||||||||||
Condensed Consolidated Financial Data | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Results of Operations | ||||||||||||
Net revenues | $ | 38,826 | $ | 43,625 | $ | 68,948 | $ | 85,612 | ||||
Cost of products sold | 13,808 | 17,730 | 25,850 | 35,250 | ||||||||
Gross profit | 25,018 | 25,895 | 43,098 | 50,362 | ||||||||
Operating expenses: | ||||||||||||
Research and development | 4,535 | 4,261 | 8,906 | 8,336 | ||||||||
Sales and marketing | 7,687 | 7,429 | 14,982 | 14,928 | ||||||||
General and administrative | 7,262 | 8,647 | 16,192 | 22,038 | ||||||||
Change in fair value of acquisition-related contingent consideration | 249 | — | 1,544 | — | ||||||||
Total operating expenses | 19,733 | 20,337 | 41,624 | 45,302 | ||||||||
Operating income | 5,285 | 5,558 | 1,474 | 5,060 | ||||||||
Other income | 524 | 736 | 1,048 | 1,148 | ||||||||
Income before income taxes | 5,809 | 6,294 | 2,522 | 6,208 | ||||||||
Income tax expense | 1,411 | 2,173 | 1,382 | 4,206 | ||||||||
Net income | $ | 4,398 | $ | 4,121 | $ | 1,140 | $ | 2,002 | ||||
Earnings per share: | ||||||||||||
Basic | $ | 0.07 | $ | 0.07 | $ | 0.02 | $ | 0.03 | ||||
Diluted | $ | 0.07 | $ | 0.07 | $ | 0.02 | $ | 0.03 | ||||
Weighted average shares: | ||||||||||||
Basic | 61,709 | 61,100 | 61,621 | 60,983 | ||||||||
Diluted | 62,128 | 62,244 | 62,191 | 62,379 | ||||||||
Three Months Ended June 30, | |||||||||||||||
Dollars | Percentage of Total Net Revenues |
||||||||||||||
2019 | 2018 | % Change |
2019 | 2018 | |||||||||||
Market | |||||||||||||||
Infectious disease testing | $ | 13,348 | $ | 15,919 | (16 | )% | 34 | % | 36 | % | |||||
Risk assessment testing | 3,097 | 3,315 | (7 | ) | 8 | 8 | |||||||||
Cryosurgical systems | 3,518 | 2,392 | 47 | 9 | 6 | ||||||||||
Molecular collection systems | 17,304 | 17,192 | 1 | 45 | 39 | ||||||||||
Net product and service revenues | 37,267 | 38,818 | (4 | ) | 96 | 89 | |||||||||
Royalty income | 1,114 | 2,092 | (47 | ) | 3 | 5 | |||||||||
Other | 445 | 2,715 | (84 | ) | 1 | 6 | |||||||||
Net revenues | $ | 38,826 | $ | 43,625 | (11 | )% | 100 | % | 100 | % |
Six Months Ended June 30, | |||||||||||||||
Dollars | Percentage of Total Net Revenues |
||||||||||||||
2019 | 2018 | % Change |
2019 | 2018 | |||||||||||
Market | |||||||||||||||
Infectious disease testing | $ | 25,686 | $ | 30,090 | (15 | )% | 37 | % | 35 | % | |||||
Risk assessment testing | 5,934 | 6,316 | (6 | ) | 9 | 7 | |||||||||
Cryosurgical systems | 6,093 | 5,177 | 18 | 9 | 6 | ||||||||||
Molecular collection systems | 27,886 | 35,553 | (22 | ) | 40 | 42 | |||||||||
Net product revenues | 65,599 | 77,136 | (15 | ) | 95 | 90 | |||||||||
Royalty income | 2,198 | 3,694 | (40 | ) | 3 | 4 | |||||||||
Other | 1,151 | 4,782 | (76 | ) | 2 | 6 | |||||||||
Net revenues | $ | 68,948 | $ | 85,612 | (19 | )% | 100 | % | 100 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2019 | 2018 | % Change |
2019 | 2018 | % Change |
|||||||||||||||
OraQuick® Revenues | ||||||||||||||||||||
Domestic HIV | $ | 4,460 | $ | 5,189 | (14 | )% | $ | 8,765 | $ | 10,234 | (14 | )% | ||||||||
International HIV | 5,422 | 7,397 | (27 | ) | 9,423 | 13,067 | (28 | ) | ||||||||||||
Net HIV revenues | 9,882 | 12,586 | (21 | ) | 18,188 | 23,301 | (22 | ) | ||||||||||||
Domestic HCV | 2,102 | 1,730 | 22 | 3,930 | 3,358 | 17 | ||||||||||||||
International HCV | 983 | 1,473 | (33 | ) | 2,440 | 2,138 | 14 | |||||||||||||
Net HCV revenues | 3,085 | 3,203 | (4 | ) | 6,370 | 5,496 | 16 | |||||||||||||
Net product revenues | $ | 12,967 | $ | 15,789 | (18 | )% | $ | 24,558 | $ | 28,797 | (15 | )% |
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2019 | 2018 | % Change |
2019 | 2018 | % Change |
|||||||||||||||
Molecular Collection Systems Revenues | ||||||||||||||||||||
Genomics | $ | 14,221 | $ | 15,368 | (7 | )% | $ | 22,269 | $ | 32,456 | (31 | )% | ||||||||
Microbiome | 2,975 | 1,824 | 63 | 5,300 | 3,097 | 71 | ||||||||||||||
Other | 108 | — | 100 | 317 | — | 100 | ||||||||||||||
Net product and service revenues | 17,304 | $ | 17,192 | 1 | 27,886 | $ | 35,553 | (22 | ) | |||||||||||
Royalty income | 1,114 | 2,092 | (47 | ) | 2,198 | 3,694 | (40 | ) | ||||||||||||
Other | 36 | — | 100 | 259 | — | 100 | ||||||||||||||
Total Molecular Collection Systems Revenues | $ | 18,454 | $ | 19,284 | (4 | )% | $ | 30,343 | $ | 39,247 | (23 | )% | ||||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||
June 30, 2019 | December 31, 2018 | |||||
Assets | ||||||
Cash and cash equivalents | $ | 72,567 | $ | 88,438 | ||
Short-term investments | 74,446 | 68,134 | ||||
Accounts receivable, net | 29,390 | 34,842 | ||||
Inventories | 25,670 | 22,888 | ||||
Other current assets | 7,185 | 5,010 | ||||
Property, plant and equipment, net | 27,793 | 24,299 | ||||
Right of use assets, net | 5,147 | — | ||||
Intangible assets, net | 12,472 | 5,137 | ||||
Goodwill | 29,280 | 18,521 | ||||
Long-term investments | 39,555 | 44,752 | ||||
Other non-current assets | 3,960 | 3,550 | ||||
Total assets | $ | 327,465 | $ | 315,571 | ||
Liabilities and Stockholders’ Equity | ||||||
Accounts payable | $ | 10,956 | $ | 10,598 | ||
Deferred revenue | 3,914 | 3,521 | ||||
Contingent consideration obligation | 5,249 | — | ||||
Other current liabilities | 9,832 | 13,861 | ||||
Long-term lease liabilities | 4,196 | — | ||||
Long-term contingent consideration obligation | 649 | — | ||||
Other non-current liabilities | 4,448 | 4,213 | ||||
Stockholders’ equity | 288,221 | 283,378 | ||||
Total liabilities and stockholders’ equity | $ | 327,465 | $ | 315,571 |
Six Months Ended | ||||||
June 30, | ||||||
Additional Financial Data (Unaudited) | 2019 | 2018 | ||||
Capital expenditures | $ | 5,513 | $ | 4,484 | ||
Depreciation and amortization | $ | 3,610 | $ | 3,746 | ||
Stock-based compensation | $ | 1,848 | $ | 11,262 | ||
Cash provided by operating activities | $ | 4,661 | $ | 13,928 | ||
Conference Call
The Company will host a conference call and audio webcast for analysts and investors to discuss the Company’s 2019 second quarter results, certain business developments and updated financial guidance, beginning today at
In order to listen to the conference call, please dial 844-831-3030 (Domestic) or 315-625-6887 (International) and reference Conference ID #9973117 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: ability to successfully manage and integrate 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; impact of significant customer concentration in the genomics business; failure of distributors or other customers to meet purchase forecasts, historic purchase levels or minimum purchase requirements for our products; 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 | VP Corporate Communications | |
610-882-1820 | 484-353-1575 | |
Investorinfo@orasure.com | media@orasure.com | |
www.orasure.com | www.orasure.com |
Source: OraSure Technologies, Inc.