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 three and six months
ended June 30, 2016.
Financial Highlights
- Consolidated net revenues for the second quarter of 2016 were
$31.4 million, a 3% increase from the second quarter of 2015.
Consolidated net revenues for the six months ended June 30, 2016
were $60.4 million, a 5% increase from the comparable period of
2015.
- Net revenues from sales of the Company’s OraQuick® rapid HCV
test were $3.2 million for the second quarter of 2016, representing
a 37% increase over the second quarter of 2015. Net revenues for
the OraQuick® rapid HCV test were $6.1 million for the six months
ended June 30, 2016, a 36% increase from the comparable period of
2015.
- Net revenues from international sales of the Company’s
OraQuick® HIV test were $2.0 million for the second quarter of
2016, representing a 230% increase over the second quarter of 2015.
Net international revenues for the OraQuick® HIV test were $2.8
million for the six months ended June 30, 2016, an 83% increase
from the comparable period of 2015.
- The Company’s molecular collection systems subsidiary, DNA
Genotek (“DNAG”), contributed $8.4 million in net revenues during
the second quarter of 2016, which represents a 4% increase over the
second quarter of 2015. DNAG net revenues during the six months
ended June 30, 2016 were $15.3 million, a 3% increase from the
comparable period in 2015.
- Consolidated net income for the second quarter of 2016 was $3.8
million, or $0.07 per share on a fully-diluted basis, which
compares to consolidated net income of $2.0 million, or $0.03 per
share on a fully-diluted basis, for the second quarter of
2015. Consolidated net income for the six months ended June
30, 2016 was $6.3 million, or $0.11 per share on a fully-diluted
basis, which compares to consolidated net income of $2.1 million,
or $0.04 per share, for the comparable period of 2015.
- Cash and short-term investments totaled $113.4 million and
working capital amounted to $120.3 million at June 30, 2016.
“We are pleased with the Company’s financial
performance for the second quarter of 2016, which exceeded
expectations on both the top and bottom lines,” said Douglas A.
Michels, President and CEO of OraSure Technologies. “Continued
growth in sales of our infectious disease and molecular collection
systems products were the main drivers behind this performance. We
expect long-term growth from both of these businesses and see the
international marketplace as an emerging and increasingly important
strategic priority for our Company.”
Financial Results
Consolidated net product revenues for both the
second quarter and first six months of 2016 increased 5% over the
comparable periods of 2015, primarily as a result of higher sales
of the Company’s OraQuick® HCV, OraQuick® HIV, and molecular
collection systems products. These increases were partially offset
by lower sales of the Company’s risk assessment products and the
absence of sales of the Company’s OraQuick® Ebola Rapid Antigen
test. The increase for the six month period also included higher
sales of the Company’s cryosurgical systems products.
Consolidated other revenues for the second
quarter and first six months of 2016 were $3.8 million and $7.6
million, respectively. This compares to consolidated other revenues
for the second quarter and first six months of 2015 of $4.1 million
and $7.4 million, respectively. Exclusivity revenue recognized
under the Company’s HCV co-promotion agreement with AbbVie for the
second quarter and first six months of 2016 and 2015 was $3.4
million and $6.7 million, respectively. Other revenue in the
second quarter of 2016 and 2015 included $417,000 and $714,000,
respectively, of 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”). Other revenue for the
first six months of 2016 and 2015 included $899,000 and $714,000,
respectively, in BARDA funding.
Consolidated gross margin for the three and six
months ended June 30, 2016 was 67% and 68%, respectively.
Consolidated gross margin for the three and six months ended June
30, 2015 was 68% and 66%, respectively. Gross margin for the
current quarter decreased primarily due to an unfavorable product
mix partially offset by lower scrap and spoilage costs. Gross
margin for the six-month period increased largely due to lower
scrap and spoilage costs, a more favorable product mix, decreased
royalty expense, and an increase in Ebola-related funding from
BARDA.
Consolidated operating expenses decreased to
$16.7 million during the second quarter of 2016 compared to $17.9
million in the second quarter of 2015. For the six months ended
June 30, 2016, consolidated operating expenses were $34.4 million,
a decrease from the $35.3 million reported for the six months ended
June 30, 2015. The quarterly decrease was largely due to lower
costs associated with the AbbVie HCV co-promotion agreement
partially offset by higher legal costs. The decrease in the
six-month period was largely due to lower research and development
expenses and lower costs associated with the AbbVie co-promotion
agreement, partially offset by increased legal and consulting
costs.
The Company’s cash and short-term investment
balance totaled $113.4 million at June 30, 2016 compared to $101.3
million at December 31, 2015. Working capital was $120.3 million at
June 30, 2016 compared to $111.5 million at December 31, 2015. For
the six months ended June 31, 2016, the Company generated $16.7
million in cash from operations.
Third Quarter 2016
Outlook
The Company expects consolidated net revenues to
range from $31.25 to $31.75 million and is projecting consolidated
net income of between $0.07 and $0.08 per share for the third
quarter of 2016.
Financial Data
Condensed Consolidated Financial Data |
(In thousands, except per-share data) |
|
|
|
|
|
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
June 30, |
|
|
June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
2016 |
|
|
|
2015 |
|
Results of
Operations |
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
31,359 |
|
|
$ |
30,388 |
|
|
|
$ |
60,448 |
|
|
$ |
57,476 |
|
Cost of products sold |
|
|
10,274 |
|
|
|
9,692 |
|
|
|
|
19,050 |
|
|
|
19,782 |
|
Gross profit |
|
|
21,085 |
|
|
|
20,696 |
|
|
|
|
41,398 |
|
|
|
37,694 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
2,985 |
|
|
|
2,996 |
|
|
|
|
5,351 |
|
|
|
6,436 |
|
Sales and marketing |
|
|
7,397 |
|
|
|
8,904 |
|
|
|
|
16,103 |
|
|
|
16,788 |
|
General and administrative |
|
|
6,354 |
|
|
|
6,075 |
|
|
|
|
12,896 |
|
|
|
12,040 |
|
Total operating expenses |
|
|
16,736 |
|
|
|
17,975 |
|
|
|
|
34,350 |
|
|
|
35,264 |
|
Operating income |
|
|
4,349 |
|
|
|
2,721 |
|
|
|
|
7,048 |
|
|
|
2,430 |
|
Other income
(expense) |
|
|
(340 |
) |
|
|
(95 |
) |
|
|
|
(532 |
) |
|
|
314 |
|
Income before income
taxes |
|
|
4,009 |
|
|
|
2,626 |
|
|
|
|
6,516 |
|
|
|
2,744 |
|
Income tax expense |
|
|
173 |
|
|
|
658 |
|
|
|
|
234 |
|
|
|
663 |
|
Net income |
|
$ |
3,836 |
|
|
$ |
1,968 |
|
|
|
$ |
6,282 |
|
|
$ |
2,081 |
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.07 |
|
|
$ |
0.03 |
|
|
|
$ |
0.11 |
|
|
$ |
0.04 |
|
Diluted |
|
$ |
0.07 |
|
|
$ |
0.03 |
|
|
|
$ |
0.11 |
|
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
55,543 |
|
|
|
56,453 |
|
|
|
|
55,497 |
|
|
|
56,398 |
|
Diluted |
|
|
56,208 |
|
|
|
56,687 |
|
|
|
|
56,144 |
|
|
|
56,678 |
|
Summary of Net Revenues by Market and Product
(Unaudited)
|
|
Three Months Ended June
30, |
|
|
|
Dollars |
|
|
|
|
Percentage of Total Net
Revenues |
Market |
|
|
2016 |
|
|
|
2015 |
|
|
%
Change |
|
2016 |
|
2015 |
|
Infectious disease
testing |
|
$ |
12,949 |
|
|
$ |
11,792 |
|
|
|
10 |
|
% |
|
41 |
% |
|
39 |
% |
Risk assessment
testing |
|
|
3,159 |
|
|
|
3,466 |
|
|
|
(9 |
) |
|
|
10 |
|
|
11 |
|
Cryosurgical
systems |
|
|
3,041 |
|
|
|
2,953 |
|
|
|
3 |
|
|
|
10 |
|
|
10 |
|
Molecular collection
systems |
|
|
8,433 |
|
|
|
8,102 |
|
|
|
4 |
|
|
|
27 |
|
|
27 |
|
Net product revenues |
|
|
27,582 |
|
|
|
26,313 |
|
|
|
5 |
|
|
|
88 |
|
|
87 |
|
Other |
|
|
3,777 |
|
|
|
4,075 |
|
|
|
(7 |
) |
|
|
12 |
|
|
13 |
|
Net revenues |
|
$ |
31,359 |
|
|
$ |
30,388 |
|
|
|
3 |
|
% |
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June
30, |
|
Dollars |
|
|
|
|
Percentage of Total Net
Revenues |
Market |
|
2016 |
|
|
|
2015 |
|
|
% Change |
|
2016 |
|
2015 |
|
Infectious disease
testing |
$ |
24,317 |
|
|
$ |
23,288 |
|
|
|
4 |
|
% |
|
40 |
% |
|
40 |
% |
Risk assessment
testing |
|
6,265 |
|
|
|
6,473 |
|
|
|
(3 |
) |
|
|
10 |
|
|
11 |
|
Cryosurgical
systems |
|
6,922 |
|
|
|
5,498 |
|
|
|
26 |
|
|
|
12 |
|
|
10 |
|
Molecular collection
systems |
|
15,323 |
|
|
|
14,819 |
|
|
|
3 |
|
|
|
25 |
|
|
26 |
|
Net product revenues |
|
52,827 |
|
|
|
50,078 |
|
|
|
5 |
|
|
|
87 |
|
|
87 |
|
Other |
|
7,621 |
|
|
|
7,398 |
|
|
|
3 |
|
|
|
13 |
|
|
13 |
|
Net revenues |
$ |
60,448 |
|
|
$ |
57,476 |
|
|
|
5 |
|
% |
|
100 |
% |
|
100 |
% |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
HIV
Revenues |
|
2016 |
|
|
|
2015 |
|
|
%
Change |
|
|
2016 |
|
|
|
2015 |
|
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
$ |
5,886 |
|
|
$ |
6,593 |
|
|
|
(11 |
) |
% |
|
$ |
11,588 |
|
|
$ |
12,601 |
|
|
|
(8 |
) |
% |
International |
|
1,969 |
|
|
|
596 |
|
|
|
230 |
|
|
|
|
2,824 |
|
|
|
1,544 |
|
|
|
83 |
|
|
Domestic OTC |
|
1,739 |
|
|
|
1,719 |
|
|
|
1 |
|
|
|
|
3,262 |
|
|
|
3,280 |
|
|
|
(1 |
) |
|
Net product revenues |
$ |
9,594 |
|
|
$ |
8,908 |
|
|
|
8 |
|
% |
|
$ |
17,674 |
|
|
$ |
17,425 |
|
|
|
1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
HCV
Revenues |
|
2016 |
|
|
|
2015 |
|
|
%
Change |
|
|
2016 |
|
|
|
2015 |
|
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
$ |
1,788 |
|
|
$ |
1,693 |
|
|
|
6 |
|
% |
|
$ |
3,689 |
|
|
$ |
2,889 |
|
|
|
28 |
|
% |
International |
|
1,428 |
|
|
|
646 |
|
|
|
121 |
|
|
|
|
2,430 |
|
|
|
1,619 |
|
|
|
50 |
|
|
Net product revenues |
|
3,216 |
|
|
|
2,339 |
|
|
|
37 |
|
|
|
|
6,119 |
|
|
|
4,508 |
|
|
|
36 |
|
|
Amortization of exclusivity
payments |
|
3,360 |
|
|
|
3,361 |
|
|
|
0 |
|
|
|
|
6,722 |
|
|
|
6,684 |
|
|
|
1 |
|
|
Net HCV-related revenues |
$ |
6,576 |
|
|
$ |
5,700 |
|
|
|
15 |
|
% |
|
$ |
12,841 |
|
|
$ |
11,192 |
|
|
|
15 |
|
% |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
Cryosurgical
Systems Revenues |
|
2016 |
|
|
|
2015 |
|
|
%
Change |
|
|
2016 |
|
|
|
2015 |
|
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
professional |
$ |
1,145 |
|
|
$ |
1,008 |
|
|
|
14 |
|
% |
|
$ |
2,699 |
|
|
$ |
1,668 |
|
|
|
62 |
|
% |
International
professional |
|
211 |
|
|
|
142 |
|
|
|
49 |
|
|
|
|
446 |
|
|
|
498 |
|
|
|
(10 |
) |
|
Domestic OTC |
|
345 |
|
|
|
108 |
|
|
|
219 |
|
|
|
|
723 |
|
|
|
163 |
|
|
|
344 |
|
|
International OTC |
|
1,340 |
|
|
|
1,695 |
|
|
|
(21 |
) |
|
|
|
3,054 |
|
|
|
3,169 |
|
|
|
(4 |
) |
|
Net cryosurgical systems
revenues |
$ |
3,041 |
|
|
$ |
2,953 |
|
|
|
3 |
|
% |
|
$ |
6,922 |
|
|
$ |
5,498 |
|
|
|
26 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance
Sheets
(Unaudited) |
|
|
|
June 30, 2016 |
|
December 31, 2015 |
Assets |
|
|
|
|
$ |
105,701 |
|
|
$ |
94,094 |
|
Cash |
Short-term
investments |
|
7,736 |
|
|
|
7,225 |
|
Accounts receivable,
net |
|
18,436 |
|
|
|
19,265 |
|
Inventories |
|
11,366 |
|
|
|
13,242 |
|
Other current assets |
|
3,136 |
|
|
|
2,888 |
|
Property and equipment,
net |
|
20,200 |
|
|
|
20,083 |
|
Intangible assets,
net |
|
12,020 |
|
|
|
12,591 |
|
Goodwill |
|
19,541 |
|
|
|
18,250 |
|
Other non-current
assets |
|
1,784 |
|
|
|
1,683 |
|
Total assets |
$ |
199,920 |
|
|
$ |
189,321 |
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
Accounts payable |
$ |
3,956 |
|
|
$ |
5,087 |
|
Deferred revenue |
|
13,822 |
|
|
|
9,735 |
|
Other current
liabilities |
|
8,293 |
|
|
|
10,412 |
|
Other non-current
liabilities |
|
2,018 |
|
|
|
1,768 |
|
Deferred income taxes |
|
3,043 |
|
|
|
2,883 |
|
Stockholders’ equity |
|
168,788 |
|
|
|
159,436 |
|
Total liabilities and stockholders’
equity |
$ |
199,920 |
|
|
$ |
189,321 |
|
|
|
|
|
|
Six months ended |
June 30, |
Additional
Financial Data
(Unaudited) |
|
2016 |
|
|
|
2015 |
|
|
|
|
|
Capital expenditures |
$ |
2,729 |
|
|
$ |
1,145 |
|
Depreciation and
amortization |
$ |
2,778 |
|
|
$ |
2,849 |
|
Stock-based
compensation |
$ |
2,942 |
|
|
$ |
3,008 |
|
Cash provided by (used in)
operating activities |
$ |
16,741 |
|
|
$ |
(3,421 |
) |
Conference Call
The Company will host a conference call and
audio webcast to discuss the Company’s 2016 second quarter
financial results, certain business developments and financial
guidance for the third 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 #46406766 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 August 10, 2016, by dialing 855-859-2056 (Domestic) or
404-537-3406 (International) and entering the Conference ID
#46406766.
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; 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 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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