OraSure Technologies, Inc. (NASDAQ:OSUR), a leader in point-of-care
diagnostic tests and specimen collection devices, today announced
its consolidated financial results for the first quarter ended
March 31, 2016.
Financial Highlights
- Consolidated net revenues for the first quarter of 2016 were
$29.1 million, a 7% increase from the first quarter of 2015.
- Net domestic revenues from sales of the Company’s OraQuick®
rapid HCV test were $1.9 million for the first quarter of 2016,
representing a 59% increase over the first quarter of 2015. Total
HCV-related revenues, including exclusivity payments recognized
under the HCV co-promotion agreement with AbbVie, were $6.3
million, as compared to $5.5 million for the first quarter of 2015.
- The Company’s molecular collection systems subsidiary, DNA
Genotek (“DNAG”), contributed $6.9 million in net revenues during
the first quarter of 2016, which represents a 3% increase over the
first quarter of 2015.
- Sales of the Company’s cryosurgical systems products were $3.9
million, representing a 53% increase over the comparable quarter of
2015.
- Consolidated net income for the first quarter of 2016 was $2.4
million, or $0.04 per share on a fully-diluted basis, which
compares to a consolidated net income of $113,000, or $0.00 per
share, for the first quarter of 2015.
- Cash and short-term investments totaled $102.2 million and
working capital amounted to $114.0 million at March 31, 2016.
“We are pleased with the Company’s financial
performance for the first quarter of 2016,” said Douglas A.
Michels, President and CEO of OraSure Technologies.
“Continued growth in sales of our OraQuick® HCV and molecular
collection systems products and improved performance by our
cryosurgical systems business were the main drivers behind this
performance. We expect to deliver continued profitable
results during the remaining quarters of the year.”
Financial Results
Consolidated net product revenues for the first
quarter of 2016 increased 6% over the comparable period of 2015,
primarily as a result of higher sales of the Company’s cryosurgical
systems, OraQuick® HCV and molecular collection systems
products. These increases were partially offset by lower
sales of the Company’s OraQuick® professional HIV
product.
Consolidated other revenues were $3.8 million
and $3.3 million for the first quarter of 2016 and 2015,
respectively. Amounts for both quarters included exclusivity
payments recognized under the Company’s HCV co-promotion agreement
with AbbVie. Other revenue for the current quarter also
included Ebola-related funding received from the U.S. Department of
Health and Human Services Office of the Assistant Secretary for
Preparedness and Response’s Biomedical Advanced Research and
Development Authority (“BARDA”).
Consolidated gross margin for the three months
ended March 31, 2016 was 70% compared to 63% for the three months
ended March 31, 2015. Gross margin for the current
quarter improved largely due to a more favorable product mix, a
reduction in royalty expense and scrap and spoilage costs, and the
Ebola-related funding from BARDA.
Consolidated operating expenses increased to
$17.6 million during the first quarter of 2016 compared to $17.3
million in the comparable period of 2015. This increase was
largely due to higher costs associated with the AbbVie co-promotion
agreement and increased general and administrative expenses due to
higher consulting, staffing, and legal costs. These increases were
partially offset by lower research and development expenses.
The Company’s cash and short-term investment
balance totaled $102.2 million at March 31, 2016 compared to $101.3
million at December 31, 2015. Working capital was $114.0
million at March 31, 2016 compared to $111.5 million at December
31, 2015. For the three months ended March 31, 2016, the
Company generated $4.7 million in cash from operations.
Second Quarter 2016
Outlook
The Company expects consolidated net revenues to
range from $30.5 to $31.5 million and is projecting consolidated
net income of between $0.04 and $0.05 per share for the second
quarter of 2016.
Financial Data
|
Condensed Consolidated Financial
Data |
(In thousands, except per-share
data) |
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
|
Three months ended |
|
|
March 31, |
|
|
|
2016 |
|
|
|
2015 |
|
Results of
Operations |
|
|
|
|
Net revenues |
|
$ |
29,089 |
|
|
$ |
27,088 |
|
Cost of products
sold |
|
|
8,776 |
|
|
|
10,090 |
|
Gross profit |
|
|
20,313 |
|
|
|
16,998 |
|
Operating
expenses: |
|
|
|
|
Research and development |
|
|
2,366 |
|
|
|
3,440 |
|
Sales and marketing |
|
|
8,706 |
|
|
|
7,884 |
|
General and administrative |
|
|
6,542 |
|
|
|
5,965 |
|
Total operating expenses |
|
|
17,614 |
|
|
|
17,289 |
|
Operating income (loss) |
|
|
2,699 |
|
|
|
(291 |
) |
Other income
(expense) |
|
|
(192 |
) |
|
|
409 |
|
Income before income
taxes |
|
|
2,507 |
|
|
|
118 |
|
Income tax expense |
|
|
61 |
|
|
|
5 |
|
Net income |
|
$ |
2,446 |
|
|
$ |
113 |
|
Earnings per
share: |
|
|
|
|
Basic |
|
$ |
0.04 |
|
|
$ |
0.00 |
|
Diluted |
|
$ |
0.04 |
|
|
$ |
0.00 |
|
|
|
|
|
|
Weighted average
shares: |
|
|
|
|
Basic |
|
|
55,451 |
|
|
|
56,343 |
|
Diluted |
|
|
56,079 |
|
|
|
57,173 |
|
|
|
|
|
|
|
|
|
|
|
Summary of Net Revenues by Market and Product
(Unaudited)
|
|
|
|
|
|
Three Months Ended March
31, |
|
|
|
|
|
|
|
|
Percentage of |
|
|
|
|
|
|
|
|
Total Net |
|
|
|
Dollars |
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
Market |
|
|
2016 |
|
|
|
2015 |
|
|
Change |
|
2016 |
|
|
2015 |
|
|
Infectious disease
testing |
|
$ |
11,368 |
|
|
$ |
11,495 |
|
|
|
(1 |
) |
% |
|
39 |
% |
|
43 |
% |
Risk assessment
testing |
|
|
3,105 |
|
|
|
3,008 |
|
|
|
3 |
|
|
|
11 |
|
|
11 |
|
Cryosurgical
systems |
|
|
3,882 |
|
|
|
2,545 |
|
|
|
53 |
|
|
|
13 |
|
|
9 |
|
Molecular collection
systems |
|
|
6,890 |
|
|
|
6,717 |
|
|
|
3 |
|
|
|
24 |
|
|
25 |
|
Net product
revenues |
|
25,245 |
|
|
|
23,765 |
|
|
|
6 |
|
|
|
87 |
|
|
88 |
|
Other |
|
|
3,844 |
|
|
|
3,323 |
|
|
|
16 |
|
|
|
13 |
|
|
12 |
|
Net revenues |
$ |
29,089 |
|
|
$ |
27,088 |
|
|
|
7 |
|
% |
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
|
|
|
|
|
|
|
|
% |
HIV
Revenues |
|
|
2016 |
|
|
|
2015 |
|
|
Change |
|
|
|
|
|
|
|
|
Domestic |
|
$ |
5,703 |
|
|
$ |
6,007 |
|
|
|
(5 |
) |
% |
International |
|
|
854 |
|
|
|
948 |
|
|
|
(10 |
) |
|
Domestic OTC |
|
|
1,523 |
|
|
|
1,561 |
|
|
|
(2 |
) |
|
Net product
revenues |
$ |
8,080 |
|
|
$ |
8,516 |
|
|
|
(5 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
|
|
|
|
|
|
|
|
% |
HCV
Revenues |
|
|
2016 |
|
|
|
2015 |
|
|
Change |
|
|
|
|
|
|
|
|
Domestic |
|
$ |
1,900 |
|
|
$ |
1,197 |
|
|
|
59 |
|
% |
International |
|
|
1,001 |
|
|
|
972 |
|
|
|
3 |
|
|
Net product
revenues |
|
2,901 |
|
|
|
2,169 |
|
|
|
34 |
|
|
Amortization of exclusivity payments |
|
3,362 |
|
|
|
3,323 |
|
|
|
1 |
|
|
Net HCV-related
revenues |
$ |
6,263 |
|
|
$ |
5,492 |
|
|
|
14 |
|
% |
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
|
|
|
|
|
|
|
|
% |
Intercept®
Revenues |
|
|
2016 |
|
|
|
2015 |
|
|
Change |
|
|
|
|
|
|
|
|
Net Intercept®
revenues |
|
$ |
1,891 |
|
|
$ |
1,575 |
|
|
20 |
% |
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
|
|
|
|
|
|
|
|
% |
Cryosurgical
Systems Revenues |
|
|
2016 |
|
|
|
2015 |
|
|
Change |
|
|
|
|
|
|
|
|
Domestic professional |
|
$ |
1,554 |
|
|
$ |
661 |
|
|
|
135 |
|
% |
International
professional |
|
|
235 |
|
|
|
357 |
|
|
|
(34 |
) |
|
Domestic OTC |
|
|
378 |
|
|
|
55 |
|
|
|
587 |
|
|
International OTC |
|
|
1,715 |
|
|
|
1,472 |
|
|
|
17 |
|
|
Net cryosurgical
systems revenues |
$ |
3,882 |
|
|
$ |
2,545 |
|
|
|
53 |
|
% |
Condensed Consolidated Balance
Sheets
(Unaudited) |
|
|
March 31, 2016 |
|
December 31, 2015 |
Assets |
|
|
|
|
|
|
|
|
|
|
|
Cash |
$ |
94,558 |
|
|
$ |
94,094 |
|
Short-term
investments |
|
7,689 |
|
|
|
7,225 |
|
Accounts receivable,
net |
|
16,734 |
|
|
|
19,265 |
|
Inventories |
|
12,325 |
|
|
|
13,242 |
|
Other current assets |
|
3,029 |
|
|
|
2,888 |
|
Property and equipment,
net |
|
20,204 |
|
|
|
20,083 |
|
Intangible assets,
net |
|
12,616 |
|
|
|
12,591 |
|
Goodwill |
|
19,422 |
|
|
|
18,250 |
|
Other non-current
assets |
|
1,902 |
|
|
|
1,683 |
|
Total assets |
$ |
188,479 |
|
|
$ |
189,321 |
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
Accounts payable |
$ |
5,287 |
|
|
$ |
5,087 |
|
Deferred revenue |
|
7,236 |
|
|
|
9,735 |
|
Other current
liabilities |
|
7,821 |
|
|
|
10,412 |
|
Other non-current
liabilities |
|
2,070 |
|
|
|
1,768 |
|
Deferred income taxes |
|
3,050 |
|
|
|
2,883 |
|
Stockholders’ equity |
|
163,015 |
|
|
|
159,436 |
|
Total liabilities and
stockholders’ equity |
$ |
188,479 |
|
|
$ |
189,321 |
|
|
Three months ended |
|
March 31, |
Additional
Financial Data
(Unaudited) |
|
2016 |
|
|
|
2015 |
|
|
|
|
|
Capital
expenditures |
$ |
1,593 |
|
|
$ |
437 |
|
Depreciation and
amortization |
$ |
1,354 |
|
|
$ |
1,409 |
|
Stock-based
compensation |
$ |
1,452 |
|
|
$ |
1,475 |
|
Cash provided by (used
in) operating activities |
$ |
4,744 |
|
|
$ |
(6,591 |
) |
|
|
|
|
|
|
|
|
Conference Call
The Company will host a conference call and
audio webcast to discuss the Company’s 2016 first quarter financial
results, certain business developments and financial guidance for
the second quarter of 2016, beginning today 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 Financial Officer and Chief Operating Officer. The
call will include prepared remarks by management and a question and
answer session.
In order to listen to the conference call,
please either dial 844-831-3030 (Domestic) or 315-625-6887
(International) and reference Conference ID #83627952 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 May 11, 2016, by dialing 855-859-2056 (Domestic) or
404-537-3406 (International) and entering the Conference ID
#83627952.
About OraSure Technologies
OraSure Technologies is a leader in the
development, manufacture and distribution of point-of-care
diagnostic and collection devices and other technologies designed
to detect or diagnose critical medical conditions. Its
first-to-market, innovative products include rapid tests for the
detection of antibodies to HIV and HCV on the OraQuick® platform,
oral fluid sample collection, stabilization and preparation
products for molecular diagnostic applications, and oral fluid
laboratory tests for detecting various drugs of abuse. OraSure's
portfolio of products is sold globally to various clinical
laboratories, hospitals, clinics, community-based organizations and
other public health organizations, research and academic
institutions, distributors, government agencies, physicians'
offices, commercial and industrial entities and consumers. The
Company's products enable healthcare providers to deliver critical
information to patients, empowering them to make decisions to
improve and protect their health.
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 FDA or other regulators; 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; our ability to achieve financial and performance
objectives under the HCV co-promotion agreement with AbbVie;
failure of distributors or other customers to meet purchase
forecasts, historic purchase levels or minimum purchase
requirements for our products; impact of replacing distributors;
inventory levels at distributors and other customers; ability of
DNAG to achieve its financial and strategic objectives and continue
to increase its revenues; ability to identify, complete, integrate
and realize the full benefits of future acquisitions; impact of
competitors, competing products and technology changes; impact of
negative economic conditions, high unemployment and poor credit
conditions; 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 testing or other
products; changes in market acceptance of products based on product
performance or other factors, including changes in CDC or other
testing guidelines, algorithms or other recommendations; 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; history of
losses and ability to achieve sustained profitability; ability to
utilize net operating loss carry forwards or other deferred tax
assets; volatility of OraSure’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 and civil
unrest; and general political, business and economic
conditions. These and other factors are discussed more
fully in the Company’s Securities and Exchange Commission
filings, including its registration statements, Annual Report on
Form 10-K for the year ended December 31, 2015, 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. The forward-looking statements are
made as of the date of this press release and OraSure Technologies
undertakes no duty to update these statements.
Company Contact:
Ronald H. Spair
Chief Financial Officer
610-882-1820
Investorinfo@orasure.com
www.orasure.com
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