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): July 31, 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) |
Registrants 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 July 31, 2007, OraSure Technologies, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2007 and providing an update on financial guidance for the third 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 July 31, 2007, announcing financial results of OraSure Technologies, Inc. for the quarter ended June 30, 2007 and providing an update on financial guidance for the third 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: July 31, 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 July 31, 2007, announcing financial results of OraSure Technologies, Inc. for the quarter ended June 30, 2007 and providing an update on financial guidance for the third quarter and full year 2007. |
Exhibit 99
Company Contact:
Ronald H. Spair
Chief Financial Officer
610-882-1820
Investorinfo@orasure.com
www.orasure.com
OraSure Technologies Announces Record 2007 Second Quarter Results
- Increases 2007 Full Year Revenue Guidance -
BETHLEHEM, PA July 31, 2007 (BW HealthWire) OraSure Technologies, Inc. (NASDAQ: OSUR), a market leader in oral fluid diagnostics, today announced record quarterly revenues of $21.4 million for the three months ended June 30, 2007, a 22% increase over the $17.6 million in revenues recorded for the three months ended June 30, 2006. Increased sales of the Companys OraQuick ADVANCE® rapid HIV-1/2 antibody test, substance abuse testing products and international over-the-counter (OTC) cryosurgery products, together with an increase in funded research and development related to the Companys rapid Hepatitis C (HCV) test, contributed to the increase in total revenues during the second quarter.
The Companys net income was $955,000 or $0.02 per share on a fully-diluted basis for the second quarter of 2007, compared to net income of $1.2 million, or $0.03 per share on a fully-diluted basis for the second quarter of 2006. This decrease is primarily the result of higher operating expenses during the current quarter, as described below.
For the six months ended June 30, 2007, the Company recorded revenues of $41.5 million, an increase of 26% when compared to revenues of $32.8 million for the six months ended June 30, 2006. The Company recorded net income of $2.4 million, or $0.05 per share on a fully-diluted basis, for the six months ended June 30, 2007, compared to net income of $2.1 million, or $0.04 per share on a fully-diluted basis, during the six months ended June 30, 2006.
Gross margin remained at 63% for both the three-month and six-month periods ended June 30, 2007 and 2006.
Operating expenses for the second quarter of 2007 increased to $12.9 million from $9.7 million in the second quarter of 2006. Operating expenses for the six months ended June 30, 2007 were $24.8 million, compared to $18.4 million for the comparable period in 2006. These increases were 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, higher legal expenses, and additional consulting expenses related to long-range facilities planning and the implementation of the Companys new enterprise resource planning system.
We are very pleased with the Companys financial results in the second quarter, said Douglas A. Michels, President and Chief Executive Officer of OraSure Technologies. Continued growth in infectious disease testing, substance abuse testing and international OTC cryosurgical systems revenues has resulted in yet another excellent quarter. We also made good progress during the quarter towards achieving our long-term strategic initiatives. We continue to believe that 2007 will be a very successful year for our Company, both financially and strategically.
Cash, cash equivalents and short-term investments totaled $89.1 million and working capital was $103.9 million at June 30, 2007, compared to $91.0 million and $96.0 million, respectively, at December 31, 2006.
Cash flow from operations for the six months ended June 30, 2007 was $2.7 million, compared to $8.2 million for the comparable period in 2006. The decrease of $5.5 million was primarily the result of increases in accounts receivable and inventories, offset by an increase in accounts payable and accrued expenses during the current six-month period.
2007 Financial Guidance
Based on the Companys strong performance during the first six months of 2007 and expected increases in sales of OTC cryosurgery products, the Company expects revenues of $21.0 to $21.5 million in the third quarter and is increasing full-year 2007 revenue guidance to approximately $83.0 million. Fully diluted earnings per share are expected to range from breakeven to $0.01 per share in the third quarter and to be approximately $0.05 per share for the full year.
Condensed Financial Data
(In thousands, except per-share
data and percentages)
Unaudited
Three months ended June 30, |
Six months ended June 30, | |||||||||||
Results of Operations | 2007 | 2006 | 2007 | 2006 | ||||||||
Revenues |
$ | 21,352 | $ | 17,564 | $ | 41,461 | $ | 32,782 | ||||
Cost of products sold |
7,889 | 6,532 | 15,474 | 12,151 | ||||||||
Gross profit |
13,463 | 11,032 | 25,987 | 20,631 | ||||||||
Operating expenses: |
||||||||||||
Research and development |
3,304 | 1,748 | 6,224 | 3,397 | ||||||||
Acquired in-process technology |
| 600 | | 600 | ||||||||
Sales and marketing |
5,249 | 4,238 | 10,020 | 8,345 | ||||||||
General and administrative |
4,325 | 3,143 | 8,562 | 6,100 | ||||||||
Total operating expenses |
12,878 | 9,729 | 24,806 | 18,442 | ||||||||
Operating income |
585 | 1,303 | 1,181 | 2,189 | ||||||||
Other income, net |
969 | 896 | 3,358 | 1,687 | ||||||||
Income tax provision |
599 | 991 | 2,098 | 1,768 | ||||||||
Net income |
$ | 955 | $ | 1,208 | $ | 2,441 | $ | 2,108 | ||||
Earnings per share: |
||||||||||||
Basic |
$ | 0.02 | $ | 0.03 | $ | 0.05 | $ | 0.05 | ||||
Diluted |
$ | 0.02 | $ | 0.03 | $ | 0.05 | $ | 0.04 | ||||
Weighted average shares: |
||||||||||||
Basic |
46,215 | 45,902 | 46,165 | 45,871 | ||||||||
Diluted |
46,629 | 46,731 | 46,592 | 46,783 | ||||||||
Three months ended June 30, | |||||||||||||||
Percentage of | |||||||||||||||
Dollars | % | Total Revenues | |||||||||||||
Market Revenues | 2007 | 2006 | Change | 2007 | 2006 | ||||||||||
Infectious disease testing |
$ | 9,185 | $ | 7,561 | 21 | % | 43 | % | 43 | % | |||||
Substance abuse testing |
4,396 | 4,039 | 9 | 21 | 23 | ||||||||||
Cryosurgical systems |
5,772 | 4,580 | 26 | 27 | 26 | ||||||||||
Insurance risk assessment |
1,350 | 1,307 | 3 | 6 | 7 | ||||||||||
Product revenues |
20,703 | 17,487 | 18 | 97 | 99 | ||||||||||
Licensing and product development |
649 | 77 | 743 | 3 | 1 | ||||||||||
Total revenues |
$ | 21,352 | $ | 17,564 | 22 | % | 100 | % | 100 | % | |||||
Six months ended June 30, | |||||||||||||||||||||
Percentage of | |||||||||||||||||||||
Dollars | % Change |
Total Revenues | |||||||||||||||||||
Market Revenues |
2007 | 2006 | 2007 | 2006 | |||||||||||||||||
Infectious disease testing |
$ | 18,117 | $ | 13,702 | 32 | % | 44 | % | 42 | % | |||||||||||
Substance abuse testing |
8,325 | 7,481 | 11 | 20 | 23 | ||||||||||||||||
Cryosurgical systems |
11,452 | 9,038 | 27 | 28 | 27 | ||||||||||||||||
Insurance risk assessment |
2,239 | 2,394 | (6 | ) | 5 | 7 | |||||||||||||||
Product revenues |
40,133 | 32,615 | 23 | 97 | 99 | ||||||||||||||||
Licensing and product development |
1,328 | 167 | 695 | 3 | 1 | ||||||||||||||||
Total revenues |
$ | 41,461 | $ | 32,782 | 26 | % | 100 | % | 100 | % | |||||||||||
Three months ended | Six months ended | |||||||||||||||||||
June 30, | % Change |
June 30, | % Change |
|||||||||||||||||
OraQuick® Revenues |
2007 | 2006 | 2007 | 2006 | ||||||||||||||||
Direct to U.S. Public Health |
$ | 5,502 | $ | 4,061 | 35 | % | $ | 9,846 | $ | 6,958 | 41 | % | ||||||||
Abbott |
1,778 | 2,090 | (15 | ) | 3,928 | 3,572 | 10 | |||||||||||||
SAMHSA |
5 | | N/A | 334 | 256 | 31 | ||||||||||||||
CDC |
480 | 261 | 84 | 1,100 | 261 | 322 | ||||||||||||||
International |
514 | 230 | 123 | 1,260 | 791 | 60 | ||||||||||||||
Total OraQuick® revenues |
$ | 8,279 | $ | 6,642 | 25 | % | $ | 16,468 | $ | 11,838 | 39 | % | ||||||||
Three months ended | Six months ended | |||||||||||||||||||
June 30, | % Change |
June 30, | % Change |
|||||||||||||||||
Intercept® Revenues |
2007 | 2006 | 2007 | 2006 | ||||||||||||||||
Workplace testing |
$ | 1,977 | $ | 1,764 | 12 | % | $ | 3,523 | $ | 3,044 | 16 | % | ||||||||
Criminal Justice |
661 | 596 | 11 | 1,306 | 1,130 | 16 | ||||||||||||||
International |
633 | 469 | 35 | 1,233 | 1,026 | 20 | ||||||||||||||
Direct |
264 | 217 | 22 | 466 | 354 | 32 | ||||||||||||||
Total Intercept® revenues |
$ | 3,535 | $ | 3,046 | 16 | % | $ | 6,528 | $ | 5,554 | 17 | % | ||||||||
Three months ended | Six months ended | |||||||||||||||||||
June 30, | % Change |
June 30, | % Change |
|||||||||||||||||
Cryosurgical Systems Revenues |
2007 | 2006 | 2007 | 2006 | ||||||||||||||||
Professional domestic |
$ | 1,360 | $ | 1,313 | 4 | % | $ | 2,413 | $ | 2,401 | 0 | % | ||||||||
Professional international |
510 | 550 | (7 | ) | 977 | 921 | 6 | |||||||||||||
OTC domestic |
983 | 2,137 | (54 | ) | 3,133 | 3,956 | (21 | ) | ||||||||||||
OTC international |
2,919 | 580 | 403 | 4,929 | 1,760 | 180 | ||||||||||||||
Total revenues |
$ | 5,772 | $ | 4,580 | 26 | % | $ | 11,452 | $ | 9,038 | 27 | % | ||||||||
Unaudited | ||||||
Balance Sheets | June 30, 2007 | December 31, 2006 | ||||
Assets | ||||||
Cash, cash equivalents and short-term investments |
$ | 89,108 | $ | 91,001 | ||
Accounts receivable, net |
14,848 | 10,357 | ||||
Inventories |
7,023 | 5,535 | ||||
Current portion of deferred income taxes |
5,291 | 3,676 | ||||
Other current assets |
1,765 | 1,989 | ||||
Property and equipment, net |
19,116 | 17,375 | ||||
Deferred income taxes |
16,776 | 19,846 | ||||
Other non-current assets |
5,917 | 6,786 | ||||
Total assets |
$ | 159,844 | $ | 156,565 | ||
Liabilities and Stockholders Equity | ||||||
Current portion of long-term debt |
$ | 591 | $ | 609 | ||
Accounts payable |
4,379 | 3,312 | ||||
Accrued expenses |
9,198 | 12,659 | ||||
Long-term debt, less current portion |
9,985 | 10,030 | ||||
Other liabilities |
551 | 451 | ||||
Stockholders equity |
135,140 | 129,504 | ||||
Total liabilities and stockholders equity |
$ | 159,844 | $ | 156,565 | ||
As of June 30, | ||||||
Additional Financial Data | 2007 | 2006 | ||||
Capital expenditures |
$ | 2,598 | $ | 10,777 | ||
Depreciation and amortization |
$ | 1,321 | $ | 896 | ||
Accounts receivable days sales outstanding |
63 days | 52 days |
Conference Call
The Company will host a conference call and audio webcast today to discuss the Companys 2007 second quarter financial results, business developments and the Companys 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 6857742 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 August 7, 2007, by dialing 800-642-1687 (Domestic) or 706-645-9291 (International) and entering the Conference ID #6857742.
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 Companys 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.
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