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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 10, 2023

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.000001 par value per share		OSUR		The NASDAQ Stock Market LLC

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))

 

Indicate by a check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

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Item 2.02 – Results of Operations and Financial Condition.

 

On May 10, 2023, OraSure Technologies, Inc. (the “Company”) issued a press release announcing its consolidated financial results for the quarter ended March 31, 2023 and certain other matters. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

 

Item 7.01 – Regulation FD Disclosure.

 

On May 10, 2023, the Company held a webcast conference call with analysts and investors, during which members of the Company’s management team, including Carrie Eglinton Manner, the Company’s President and Chief Executive Officer, and Kenneth J. McGrath, the Company’s Chief Financial Officer, discussed the Company’s consolidated financial results for the quarter ended March 31, 2023, and described certain business developments.

 

The information in these Items and attached Exhibits shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing. The fact that the information and Exhibits are being furnished should not be deemed an admission as to the materiality of any information contained therein. The Company undertakes no duty or obligation to publicly update or revise the information contained in this Current Report or attached Exhibits.

Item 9.01 – Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit Number		Description
99.1		Press Release, dated May 10, 2023, announcing consolidated financial results of OraSure Technologies, Inc. for the quarter ended March 31, 2023 and certain other matters.
Exhibit 104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

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SIGNATURE

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

 

	ORASURE TECHNOLOGIES, INC.
Date: May 10, 2023	By:	/s/ Carrie Eglinton Manner
		Carrie Eglinton Manner
		President and Chief Executive Officer

 

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EXHIBIT 99.1

Investor Contact: Scott Gleason SVP Investor Relations & Corp. Communications (484) 425-0588 sgleason@orasure.com	Media Contact: Amy Koch Director, Corporate Communications (484) 523-1815 media@orasure.com

OraSure Reports 1Q23 Record Revenue of $155.0 Million; Announces New Collaborations

as Company Increasingly Focuses on Core Growth

InteliSwab® test revenue of $118.3 million in Q1, up 33% sequentially;

Company delivers cost savings and begins to taper InteliSwab® test production and expenses

 

Gross margins increase 200 basis points sequentially despite mix/pricing headwinds

 

Signs three new molecular partnerships supporting cancer diagnostics, women’s health testing, and microbiome services

Q1 GAAP EPS of $0.37; Non-GAAP EPS of $0.47

Improved cash position with $112.4 million in cash and cash equivalents;

Company anticipates additional favorable impact from working capital in 2023

Management to Host Analyst/Investor Call and Webcast Today at 5:00 p.m. ET

BETHLEHEM, PA, May 10, 2023 (GLOBE NEWSWIRE) – OraSure Technologies, Inc. (NASDAQ: OSUR), a leader in point-of-care and home diagnostic tests, specimen collection devices, and microbiome laboratory and analytical services, today announced its financial results for the three months ended March 31, 2023.

 

“This quarter we once again delivered clear progress on our transformation journey. First, to Strengthen Our Foundation we reduced our non-production workforce in Q1 by 11% in accordance with our planned $15 million in annual savings, and we will deliver additional cost savings in the near-term as COVID-19 volumes have begun to taper. We also significantly increased gross margins despite mix/pricing headwinds and implemented new packaging changes on InteliSwab® tests which are expected to result in savings of approximately $0.50 per test. With facility consolidation, implementation of additional automation, and manufacturing process upgrades, we plan to further drive efficiencies and believe we will achieve our goal to breakeven in cash flow from operations for the core business in 2024,” said OraSure President and CEO Carrie Eglinton Manner.

 

She continued, “The most important point of streamlining our cost structure is building a solid foundation to Elevate Core Growth across the enterprise. We made progress on our product pipeline as we work to expand our infectious disease and sexual health portfolio of assays and to extend our leadership in molecular products. Additionally, this quarter we signed three new molecular partnerships following our recent deals with Quest Diagnostics and Grifols which make us increasingly confident in the long-term trajectory of our molecular portfolio. Overall, we believe the steps we’ve taken this quarter have further positioned the Company to drive profitable growth and deliver additional shareholder value.”

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Financial Highlights

	Three Months Ended March 31,
	2023				2022				% Change
Core Business	$	36,554			$	36,675				0		%
COVID-19		118,409				31,032				282
Total Net Revenue	$	154,963			$	67,707				129		%

 

	Three Months Ended March 31,
	2023				2022				% Change
Net revenues	$	154,963			$	67,707				129		%
Gross profit		65,815				24,299				171
Gross margin		42.5	%			35.9	%
Non-GAAP gross profit		66,277				25,527				160
Non-GAAP gross margin		42.8	%			37.7	%
Operating income (loss)		24,321				(16,172	)		NM
Operating margin		15.7	%			-23.9	%
Non-GAAP operating income (loss)		32,658				(6,584	)		NM
Non-GAAP operating income (loss)		21.1	%			-9.7	%
Net income (loss)		27,219				(19,940	)		NM
Non-GAAP net income (loss)		34,454				(10,662	)		NM
GAAP EPS	$	0.37			$	(0.28	)		NM
Non-GAAP EPS	$	0.47			$	(0.15	)		NM			%

NM – not meaningful

 

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Recent Business Highlights

 

 

Financial Guidance

 

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The Company is guiding toward 2Q23 revenue of $62 to $67 million. Given lower April ordering activity from the U.S. government in respect to the school testing program, OraSure is guiding to InteliSwab® revenue of $25 to $30 million in the second quarter representing current government program orders. The Company is actively working with its public health partners on a path to ensure warm-base manufacturing and infectious disease outbreak readiness utilizing existing funds appropriated under its InteliSwab® contracts. Additionally, the Company anticipates experiencing some temporary margin headwinds in Q2 2023 predominantly due to InteliSwab® pricing mix. Furthermore, in support of its goal to achieve cash flow from operations breakeven by 2024, the Company plans to deliver additional cost savings beyond the $15 million announced in Q1 2023.

 

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Financial Data (Unaudited)

 

		Three Months Ended March 31,
		2023				2022
Results of Operations
Net revenues		$	154,963			$	67,707
Cost of products and services sold			89,148				43,408
Gross profit			65,815				24,299
Operating expenses:
Research and development			10,560				8,634
Sales and marketing			12,142				12,717
General and administrative			17,711				19,156
Loss on impairment			1,105				—
Change in fair value of acquisition-related contingent consideration			(24	)			(36	)
Total operating expenses			41,494				40,471
Operating income (loss)			24,321				(16,172	)
Other income			2,673				168
Income (loss) before income taxes			26,994				(16,004	)
Income tax expense (benefit)			(225	)			3,936
Net income (loss)		$	27,219			$	(19,940	)
Earnings (loss) per share:
Basic		$	0.37			$	(0.28	)
Diluted		$	0.37			$	(0.28	)
Weighted average shares:
Basic			73,112				72,194
Diluted			73,966				72,194

 

 

 

	Three Months Ended March 31,
	2023				2022				% Change
COVID-19 Diagnostics	$	118,254			$	22,136				434		%
Diagnostics		17,090				11,423				50
COVID-19 Molecular Products		155				8,896				(98	)
Molecular Products		12,942				17,933				(28	)
Molecular Services		1,379				1,733				(20	)
Other products and services		3,094				3,115				(1	)
Net product and services revenues		152,914				65,236				134
Non-product and services revenues		2,049				2,471				(17	)
Total Net Revenue	$	154,963			$	67,707				129		%

 

 

 

 

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Condensed Consolidated Balance Sheets (Unaudited)
		March 31, 2023				December 31, 2022
Assets
Cash and cash equivalents		$	90,194			$	83,980
Short-term investments			22,178				26,867
Accounts receivable, net			107,445				70,797
Inventories			77,189				95,704
Other current assets			46,589				47,842
Property, plant and equipment, net			57,343				59,413
Intangible assets, net			11,184				11,694
Goodwill			35,204				35,104
Long-term investments			—				—
Other noncurrent assets			12,089				12,779
Total assets		$	459,415			$	444,180
Liabilities and Stockholders’ Equity
Accounts payable		$	27,396			$	38,020
Deferred revenue			1,989				2,273
Other current liabilities			25,738				28,770
Other non-current liabilities			10,113				10,692
Stockholders’ equity			394,179				364,425
Total liabilities and stockholders’ equity		$	459,415			$	444,180

 

 

Additional Financial Data (Unaudited)
		Three Months Ended March 31,
		2023				2022
Capital expenditures		$	3,958			$	22,074
Depreciation and amortization		$	3,696			$	3,682
Stock-based compensation		$	2,655			$	3,524
Cash provided by (used in) operating activities		$	6,002			$	(35,821	)

 

Conference Call

 

The Company will host a conference call and audio webcast for analysts and investors to discuss the Company’s first quarter 2023 results and certain business developments, beginning today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). On the call will be Carrie Eglinton Manner, President and Chief Executive Officer, Ken McGrath, Chief Financial Officer, and Scott Gleason, SVP Investor Relations and Corporate Communications. The call will include prepared remarks by management and a question and answer session.

In order to listen to the conference call, please register to obtain a dial in and pin at the following link:

 

https://register.vevent.com/register/BI1408073fde3e47ab889cfdc791e65ccf

 

To listen to the webcast, 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 14 days. It is recommended to dial-in 15 to 20 minutes prior to the call start to reduce waiting times. If a participant will be listen-only, they are encouraged to listen via the webcast on OraSure’s Investor Relations page.

 

About InteliSwab®

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OraSure has received Emergency Use Authorizations (EUA) from the FDA for its InteliSwab® COVID-19 rapid tests. The U.S. Food and Drug Administration (“FDA”) has authorized the InteliSwab® COVID-19 Rapid Test for Over-the-Counter (OTC) use without a prescription. The FDA has also authorized the InteliSwab® COVID-19 Rapid Test Pro for professional use in point of care (POC) CLIA-waived settings, and the InteliSwab® COVID-19 Rapid Test Rx for Prescription Home Use. These remarkably simple COVID-19 lateral flow tests use samples self-collected from the lower nostrils. The InteliSwab® test’s unique design incorporates a built-in swab fully integrated into the test stick. After users swab their lower nostrils, the test stick is swirled in a pre-measured buffer solution, and the result appears right on the test stick within 30 minutes, with no instruments, batteries, smartphone or laboratory analysis needed to see the result. With less than one minute of “hands-on time,” it is as simple as “Swab, Swirl, and See.”

This product has not been FDA cleared or approved, but it has been authorized by the FDA under an EUA. The emergency use of this product has been authorized only for the detection of proteins from SARS-CoV-2, not for any other viruses or pathogens. This product is only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 under Section 564(b)(1) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 360bbb- 3(b)(1), unless the declaration is terminated or authorization is revoked sooner.

Multiple government agencies, including the U.S. Department of Defense (DoD) and Department of Health and Human Services (HHS) are working to address COVID-19 testing needs. Development of the InteliSwab® COVID-19 Rapid Test has been funded in whole or in part with federal funds from the Department of Health and Human Services; Administration for Strategic Preparedness and Response; Biomedical Advanced Research and Development Authority, under contract number 75A50120C00061 and 75A50121C00078, utilizing Health Care Enhancement Act (HCEA) funding. The DoD's Defense Assisted Acquisition (DA2) Cell led the manufacturing expansion effort for the InteliSwab® COVID-19 rapid test in coordination with the Department of the Air Force’s Acquisition COVID-19 Task Force (DAF ACT). The manufacturing effort was funded through the American Rescue Plan Act (ARPA) to enable and support domestic industrial base expansion for critical medical resources.

 

About OraSure Technologies

OraSure Technologies empowers the global community to improve health and wellness by providing access to accurate, essential information through effortless tests, collection kits and services. OraSure, together with its wholly-owned subsidiaries, DNA Genotek, Diversigen, and Novosanis, provides its customers with end-to-end solutions that encompass tools, services and diagnostics. The OraSure family of companies is a leader in the development, manufacture, and distribution of rapid diagnostic tests, sample collection and stabilization devices, and molecular services solutions designed to discover and detect critical medical conditions. OraSure’s portfolio of products is sold globally to clinical laboratories, hospitals, physician’s offices, clinics, public health and community-based organizations, research institutions, government agencies, pharmaceutical companies, commercial entities and direct to consumers. For more information on OraSure Technologies, please visit www.orasure.com.

 

Forward Looking Statements
 

This press release contains certain forward-looking statements, including with respect to products, product development activities, regulatory submissions and authorizations, revenue growth, cost savings, cash flow, increasing margins and other matters. Forward-looking statements are not guarantees of future performance

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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: our ability to satisfy customer demand; ability to reduce our spending rate, capitalize on manufacturing efficiencies and drive profitable growth; ability to achieve the anticipated cost savings as a result of our business restructuring; 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 FDA or other regulators; the impact of the novel coronavirus (“COVID-19”) pandemic on the Company's business, supply chain, labor force, ability to successfully develop new products, validate the expanded use of existing collector products, receive necessary regulatory approvals and authorizations and commercialize such products for COVID-19 testing, and demand for our COVID-19 testing products ; changes in relationships, including disputes or disagreements, with strategic partners or other parties and reliance on strategic partners for the performance of critical activities under collaborative arrangements; ability to meet increased demand for the Company’s products; impact of replacing distributors; inventory levels at distributors and other customers; ability of the Company to achieve its financial and strategic objectives and continue to increase its revenues, including the ability to expand international sales and the ability to continue to reduce costs; impact of competitors, competing products and technology changes; reduction or deferral of public funding available to customers; competition from new or better technology or lower cost products; ability to develop, commercialize and market new products; market acceptance of oral fluid or urine testing, collection or other products; market acceptance and uptake of microbiome informatics, microbial genetics technology and related analytics services; changes in market acceptance of products based on product performance or other factors, including changes in testing guidelines, algorithms or other recommendations by the Centers for Disease Control and Prevention or other agencies; 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 products and components; availability of related products produced by third parties or products required for use of our products; impact of contracting with the U.S. government; impact of negative economic conditions; ability to maintain sustained profitability; ability to utilize net operating loss carry forwards 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 the impact of changes in international funding sources and testing algorithms; adverse movements in foreign currency exchange rates; loss or impairment of sources of capital; ability to attract and retain qualified personnel; exposure to 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, civil unrest, hostilities and war ; and general political, business and economic conditions, including inflationary pressures and banking stability. These and other factors that could affect our results are discussed more fully in our SEC filings, including our registration statements, Annual Report on Form 10-K for the year ended December 31, 2022, Quarterly Reports on Form 10-Q, and other filings with the SEC. Although forward-looking statements help to provide information about future prospects, readers should keep in mind that forward-looking statements may not be reliable. Readers are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are made as of the date of this press release and OraSure Technologies undertakes no duty to update these statements.

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Statement Regarding Use of Non-GAAP Financial Measures

In this press release, the company’s financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating income (loss), and non-GAAP earnings (loss) per share. Management believes that presentation of operating results using these non-GAAP financial measures provides useful supplemental information to investors and facilitates the analysis of the company’s core operating results and comparison of operating results across reporting periods, while excluding certain expenses that may not be indicative of the Company’s recurring core business operating results. In addition, management believes these non-GAAP financial measures are useful to investors both because they (1) allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) are used by OraSure’s institutional investors and the analysis community to help them analyze the health of OraSure’s business. Management also uses non-GAAP financial measures to establish budgets and to manage the company’s business. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the schedules below and a description of the adjustments made to the GAAP financial measures is included at the end of the schedules.

The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Non-GAAP financial results are reported in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Further, non-GAAP financial measures, even if similarly titled, may not be calculated in the same manner by all companies, and therefore should not be compared.

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	OraSure Technologies GAAP to Non-GAAP Reconciliation ($ in 000's)
		Three Months Ended
		March 31,
		2023				2022
	Revenue	$	154,963			$	67,707
	GAAP Cost of products and services sold		89,148				43,408
	GAAP Gross Margin		42.5	%			35.9	%
	Stock compensation		134				150
	Amortization of acquisition-related intangible assets		132				132
	Reduction in workforce severance		35				—
	Transformation related expenses		161				371
	Inventory reserve for excess levels		—				575
	Non-GAAP Cost of Goods Sold		88,686				42,180
	Non-GAAP Gross Margin		42.8	%			37.7	%
	GAAP Operating Income (Loss)		24,321				(16,172	)
	Stock compensation		2,655				2,062
	Amortization of acquisition-related intangible assets		466				501
	Reduction in workforce severance		2,635				—
	Inventory reserve for excess levels		—				575
	Loss on impairment		1,105				—
	Transformation related expenses		449				4,153
	Executive severance expense		—				1,461
	Strategic alternative costs		—				651
	Government grant accounting		1,051				221
	Change in fair value of acquisition-related contingent consideration		(24	)			(36	)
	Non-GAAP Operating Income (Loss)		32,658				(6,584	)
	GAAP Net Income (Loss)		27,219				(19,940	)
	Stock compensation		2,655				2,062
	Amortization of acquisition-related intangible assets		466				501
	Reduction in workforce severance		2,635				—
	Inventory reserve for excess levels		—				575
	Loss on impairment		1,105				—
	Transformation related expenses		449				4,153
	Executive severance expense		—				1,461
	Strategic alternative costs		—				651
	Change in fair value of acquisition-related contingent consideration		(24	)			(36	)
	Tax effect of Non-GAAP adjustments		(51	)			(89	)
	Non-GAAP Net Income (Loss)	$	34,454			$	(10,662	)
	GAAP Earnings (Loss) Per Share:	$	0.37			$	(0.28	)
	Non-GAAP Earnings (Loss) Per Share:	$	0.47			$	(0.15	)
	Diluted Shares Outstanding		73,966				72,194

Following is a description of the adjustments made to GAAP financial measures:

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A reconciliation of our non-GAAP measures to their most directly comparable GAAP measures can be found at: https://orasure.gcs-web.com/gaap-non-gaap-reconciliation

 

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