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 full-year and fourth
quarter ended December 31, 2015.
Financial Highlights
- Consolidated net revenues for the fourth quarter of 2015 were
$32.4 million, a 13% increase from the fourth quarter of 2014.
Consolidated net revenues for the year ended December 31, 2015 were
$119.7 million, a 12% increase from 2014.
- The Company’s molecular collection systems subsidiary, DNA
Genotek (“DNAG”), contributed $7.8 million in net revenues during
the fourth quarter of 2015, which represents a 24% increase over
the fourth quarter of 2014. Net revenues from this segment
for the full-year of 2015 were $29.9 million, a 26% increase from
2014.
- Net domestic revenues from sales of the Company’s OraQuick®
rapid HCV test were $2.7 million for the fourth quarter of 2015,
representing a 160% increase over the fourth quarter of 2014 and
41% sequential growth from the third quarter of 2015. Net
domestic product revenues for this product were $7.5 million for
the year ended December 31, 2015, a 78% increase from 2014.
Total HCV-related revenues, including exclusivity payments
recognized under the HCV co-promotion agreement with AbbVie, were
$7.4 million and $24.9 million for the fourth quarter and full-year
of 2015, respectively, as compared to $5.1 million and $14.8
million for the fourth quarter and full-year of 2014, respectively.
- Consolidated net income for the fourth quarter of 2015 was $4.6
million, or $0.08 per share on a fully-diluted basis, which
compares to a consolidated net loss of $2.7 million, or $0.05 per
share, for the fourth quarter of 2014. Consolidated net
income for the year ended December 31, 2015 was $8.2 million, or
$0.14 per share on a fully-diluted basis, which compares to a
consolidated net loss of $4.6 million, or $0.08 per share, for
2014. The Company’s bottom line results for the full-year of
2014 included a $5.5 million payment received as a result of the
termination of the Company’s drug assay collaboration with Roche
Diagnostics. This payment was recorded as an offset to
expenses in the second quarter of 2014 and did not recur in
2015.
- Cash and short-term investments totaled $101.3 million and
working capital amounted to $111.5 million at December 31,
2015.
“We are pleased with our fourth quarter and
full-year 2015 performance,” said Douglas A. Michels, President and
CEO of OraSure Technologies. “Both our quarterly and annual
revenues reached record levels. Our molecular collection
systems and HCV product lines continue to be the primary growth
drivers for our business and the strong fourth quarter finish
creates a solid foundation as we start the new year.”
Financial Results
Consolidated net product revenues for the fourth
quarter and full-year of 2015 increased 13% and 6% over the
comparable periods of 2014, respectively, primarily as a result of
higher sales of the Company’s molecular collection systems,
OraQuick® HCV and Intercept® products. Higher sales of the
Company’s OraQuick® In-Home HIV test also contributed to the
increase in current quarter revenues. These increases were
partially offset by lower sales of the Company’s OraQuick®
professional HIV and cryosurgical systems products.
In addition, net product revenues for the fourth
quarter and full-year of 2015 included $1.0 million and $2.3
million, respectively, in sales of the Company’s OraQuick® Ebola
Rapid Antigen test. This test was not sold in 2014.
Consolidated other revenues for the fourth
quarter and full-year of 2015 were $3.7 million and $15.3 million,
respectively. Other revenues in the current quarter included
$3.4 million of exclusivity payments recognized under the Company’s
HCV co-promotion agreement with AbbVie and $319,000 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 in the
full-year of 2015 included $13.5 million of AbbVie exclusivity
payments and $1.8 million in BARDA funding. Other revenues in
the fourth quarter and full-year of 2014 included $3.4 million and
$7.6 million of AbbVie exclusivity payments, respectively.
Consolidated gross margin for the three months
and year ended December 31, 2015 was 68% and 67%,
respectively. Consolidated gross margin for both the three
months and year ended December 31, 2014 was 63%. Gross margin for
the current quarter increased largely due to a reduction in royalty
expense and in scrap and spoilage costs. Gross margin for the
full-year improved largely due to the $7.7 million increase in
other revenues, a reduction in royalty expense, and a favorable
change in the exchange rate between the Canadian and U.S.
dollar. Other revenues contributed approximately 500 and 300
basis points to gross margin for the years ended December 31, 2015
and 2014, respectively. The full-year 2015 impact of the
favorable change in exchange rate was approximately $800,000, as
compared to approximately $400,000 in 2014.
Consolidated operating expenses decreased to
$17.8 million during the fourth quarter of 2015 compared to $20.5
million in the comparable period of 2014. This decrease was
largely due to lower costs associated with the AbbVie co-promotion
agreement, lower research and development expenses, and a favorable
change in the Canadian - U.S. dollar exchange rate.
For the year ended December 31, 2015,
consolidated operating expenses were $72.2 million, an increase
from the $71.4 million reported for the year ended December 31,
2014. This increase was largely due to the absence of the
$5.5 million Roche termination payment received in 2014 which was
treated as an expense reduction, higher legal costs, and increased
costs associated with the AbbVie co-promotion agreement, partially
offset by lower promotional expenses for the Company’s OraQuick®
In-Home HIV test and the impact of a favorable change in the
Canadian – U.S. dollar exchange rate. Promotional expenses
for the OraQuick® In-Home HIV test were $1.8 million and $8.5
million for the full-year of 2015 and 2014, respectively. The
full-year 2015 impact of the favorable change in exchange rate was
approximately $2.0 million, as compared to $900,000 in 2014.
The Company’s cash and short-term investment
balance totaled $101.3 million at December 31, 2015 compared to
$97.9 million at December 31, 2014. Working capital was
$111.5 million at December 31, 2015 compared to $104.8 million at
December 31, 2014. For the year ended December 31, 2015, the
Company generated $15.8 million in cash from operations.
First Quarter 2016
Outlook
The Company expects consolidated net revenues to
range from $28.5 to $29.0 million and is projecting consolidated
net income of between $0.01 and $0.02 per share.
Financial Data
Condensed
Consolidated Financial Data |
(In thousands,
except per-share data) |
|
|
|
|
|
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
|
|
Three months
ended |
|
|
Year
ended |
December
31, |
|
|
December
31, |
|
|
2015 |
|
2014 |
|
|
2015 |
|
2014 |
Results of Operations |
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
32,382 |
|
|
$ |
28,681 |
|
|
|
$ |
119,719 |
|
|
$ |
106,464 |
|
Cost of products sold |
|
|
10,452 |
|
|
|
10,704 |
|
|
|
|
39,426 |
|
|
|
39,840 |
|
Gross profit |
|
|
21,930 |
|
|
|
17,977 |
|
|
|
|
80,293 |
|
|
|
66,624 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
2,693 |
|
|
|
3,817 |
|
|
|
|
11,654 |
|
|
|
12,058 |
|
Sales and marketing |
|
|
8,623 |
|
|
|
10,290 |
|
|
|
|
35,088 |
|
|
|
41,118 |
|
General and administrative |
|
|
6,522 |
|
|
|
6,433 |
|
|
|
|
25,493 |
|
|
|
23,750 |
|
Gain on contract termination |
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
(5,500 |
) |
Total operating expenses |
|
|
17,838 |
|
|
|
20,540 |
|
|
|
|
72,235 |
|
|
|
71,426 |
|
Operating income (loss) |
|
|
4,092 |
|
|
|
(2,563 |
) |
|
|
|
8,058 |
|
|
|
(4,802 |
) |
Other income |
|
|
379 |
|
|
|
287 |
|
|
|
|
774 |
|
|
|
531 |
|
Income (loss) before income taxes |
|
|
4,471 |
|
|
|
(2,276 |
) |
|
|
|
8,832 |
|
|
|
(4,271 |
) |
Income tax (benefit) expense |
|
|
(145 |
) |
|
|
376 |
|
|
|
|
665 |
|
|
|
343 |
|
Net income (loss) |
|
$ |
4,616 |
|
|
$ |
(2,652 |
) |
|
|
$ |
8,167 |
|
|
$ |
(4,614 |
) |
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.08 |
|
|
$ |
(0.05 |
) |
|
|
$ |
0.14 |
|
|
$ |
(0.08 |
) |
Diluted |
|
$ |
0.08 |
|
|
$ |
(0.05 |
) |
|
|
$ |
0.14 |
|
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
56,308 |
|
|
|
56,105 |
|
|
|
|
56,397 |
|
|
|
55,949 |
|
Diluted |
|
|
56,678 |
|
|
|
56,105 |
|
|
|
|
56,846 |
|
|
|
55,949 |
|
Summary of Net Revenues by Market and
Product (Unaudited)
|
|
Three
Months Ended December 31, |
|
|
|
Dollars |
|
|
|
|
Percentage
of Total Net Revenues |
|
Market |
2015 |
|
|
2014 |
|
|
%
Change |
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infectious disease testing |
$ |
14,546 |
|
|
$ |
12,602 |
|
|
|
15 |
|
% |
45 |
% |
|
44 |
% |
Substance abuse testing |
|
2,686 |
|
|
|
2,250 |
|
|
|
19 |
|
|
|
8 |
|
|
8 |
|
Cryosurgical systems |
|
2,964 |
|
|
|
3,377 |
|
|
|
(12 |
) |
|
|
9 |
|
|
11 |
|
Molecular collection systems |
|
7,775 |
|
|
|
6,255 |
|
|
|
24 |
|
|
|
24 |
|
|
22 |
|
Insurance risk assessment |
|
695 |
|
|
|
800 |
|
|
|
(13 |
) |
|
|
2 |
|
|
3 |
|
|
Net product revenues |
|
28,666 |
|
|
|
25,284 |
|
|
|
13 |
|
|
|
88 |
|
|
88 |
|
Other |
|
|
3,716 |
|
|
|
3,397 |
|
|
|
9 |
|
|
|
12 |
|
|
12 |
|
|
Net revenues |
$ |
32,382 |
|
|
$ |
28,681 |
|
|
|
13 |
|
% |
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|
|
Dollars |
|
|
|
|
|
Percentage
of Total Net Revenues |
|
Market |
2015 |
|
|
2014 |
|
|
%
Change |
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infectious disease testing |
$ |
49,129 |
|
|
$ |
47,515 |
|
|
|
3 |
|
% |
41 |
% |
45 |
% |
Substance abuse testing |
|
10,271 |
|
|
|
8,437 |
|
|
|
22 |
|
|
|
8 |
|
|
8 |
|
Cryosurgical systems |
|
11,920 |
|
|
|
15,505 |
|
|
|
(23 |
) |
|
|
10 |
|
|
15 |
|
Molecular collection systems |
|
29,924 |
|
|
|
23,778 |
|
|
|
26 |
|
|
|
25 |
|
|
22 |
|
Insurance risk assessment |
|
3,214 |
|
|
|
3,659 |
|
|
|
(12 |
) |
|
|
3 |
|
|
3 |
|
|
Net product revenues |
|
104,458 |
|
|
|
98,894 |
|
|
|
6 |
|
|
|
87 |
|
|
93 |
|
Other |
|
|
15,261 |
|
|
|
7,570 |
|
|
|
102 |
|
|
|
13 |
|
|
7 |
|
|
Net revenues |
$ |
119,719 |
|
|
$ |
106,464 |
|
|
|
12 |
|
% |
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
Year
Ended |
|
|
|
December
31, |
|
|
December
31, |
|
HIV Revenues |
2015 |
|
|
2014 |
|
|
|
%
Change |
|
|
2015 |
|
|
2014 |
|
|
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
$ |
6,809 |
|
|
$ |
8,363 |
|
|
|
(19 |
) |
% |
|
$ |
24,956 |
|
|
$ |
29,933 |
|
|
|
(17 |
) |
% |
International |
|
415 |
|
|
|
587 |
|
|
|
(29 |
) |
|
|
|
2,410 |
|
|
|
2,483 |
|
|
|
(3 |
) |
|
Domestic OTC |
|
2,069 |
|
|
|
1,502 |
|
|
|
38 |
|
|
|
|
6,992 |
|
|
|
6,493 |
|
|
|
8 |
|
|
|
Net product revenues |
$ |
9,293 |
|
|
$ |
10,452 |
|
|
|
(11 |
) |
% |
|
$ |
34,358 |
|
|
$ |
38,909 |
|
|
|
(12 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year
Ended |
|
|
December
31, |
|
December
31, |
HCV Revenues |
2015 |
|
2014 |
|
%
Change |
|
2015 |
|
2014 |
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
$ |
2,698 |
|
$ |
1,036 |
|
160 |
% |
|
$ |
7,502 |
|
$ |
4,220 |
|
|
78 |
% |
International |
|
1,306 |
|
|
707 |
|
85 |
|
|
|
3,884 |
|
|
3,048 |
|
|
27 |
|
|
Net product revenues |
|
4,004 |
|
|
1,743 |
|
130 |
|
|
|
11,386 |
|
|
7,268 |
|
|
57 |
|
Amortization of exclusivity
payments |
|
3,397 |
|
|
3,397 |
|
− |
|
|
|
13,479 |
|
|
7,570 |
|
|
78 |
|
|
Net HCV-related revenues |
$ |
7,401 |
|
$ |
5,140 |
|
44 |
% |
|
$ |
24,865 |
|
$ |
14,838 |
|
|
68 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year
Ended |
|
|
December
31, |
|
December
31, |
Intercept®
Revenues |
2015 |
|
|
2014 |
|
|
%
Change |
|
2015 |
|
|
2014 |
|
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Intercept® revenues |
$ |
2,048 |
|
|
$ |
1,629 |
|
|
26 |
% |
|
$ |
7,813 |
|
|
$ |
6,101 |
|
|
28 |
% |
|
|
Three Months
Ended |
|
Year
Ended |
|
|
December
31, |
|
December
31, |
Cryosurgical Systems
Revenues |
2015 |
|
2014 |
|
|
%
Change |
|
2015 |
|
|
2014 |
|
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic professional |
$ |
1,043 |
|
|
$ |
2,149 |
|
|
|
(51 |
) |
% |
|
$ |
4,311 |
|
|
$ |
6,750 |
|
|
|
(36 |
) |
% |
International professional |
|
157 |
|
|
|
111 |
|
|
|
41 |
|
|
|
|
916 |
|
|
|
693 |
|
|
|
32 |
|
|
Domestic over-the-counter |
|
90 |
|
|
|
108 |
|
|
|
(17 |
) |
|
|
|
390 |
|
|
|
108 |
|
|
|
261 |
|
|
International over-the-counter |
|
1,674 |
|
|
|
1,009 |
|
|
|
66 |
|
|
|
|
6,303 |
|
|
|
7,954 |
|
|
|
(21 |
) |
|
|
Net cryosurgical systems
revenues |
$ |
2,964 |
|
|
$ |
3,377 |
|
|
|
(12 |
) |
% |
|
$ |
11,920 |
|
|
$ |
15,505 |
|
|
|
(23 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated
Balance Sheets (Unaudited) |
|
|
|
December
31, 2015 |
|
December
31, 2014 |
Assets |
|
|
|
|
$ |
94,094 |
|
|
$ |
92,867 |
|
Cash |
Short-term investments |
|
7,225 |
|
|
|
5,000 |
|
Accounts receivable, net |
|
19,265 |
|
|
|
16,138 |
|
Inventories |
|
13,242 |
|
|
|
15,763 |
|
Other current assets |
|
2,888 |
|
|
|
1,446 |
|
Property and equipment, net |
|
20,083 |
|
|
|
17,934 |
|
Intangible assets, net |
|
12,591 |
|
|
|
17,505 |
|
Goodwill |
|
18,250 |
|
|
|
21,734 |
|
Other non-current assets |
|
1,683 |
|
|
|
1,246 |
|
Total assets |
$ |
189,321 |
|
|
$ |
189,633 |
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’
Equity |
|
|
|
Accounts payable |
$ |
5,087 |
|
|
$ |
7,148 |
|
Deferred revenue |
|
9,735 |
|
|
|
8,043 |
|
Other current liabilities |
|
10,412 |
|
|
|
11,271 |
|
Other non-current liabilities |
|
1,768 |
|
|
|
1,234 |
|
Deferred income taxes |
|
2,883 |
|
|
|
3,236 |
|
Stockholders’ equity |
|
159,436 |
|
|
|
158,701 |
|
Total liabilities and stockholders’
equity |
$ |
189,321 |
|
|
$ |
189,633 |
|
|
Year
ended |
December
31, |
Additional Financial Data
(Unaudited) |
2015 |
|
|
2014 |
|
|
|
|
|
|
|
Capital expenditures |
$ |
3,744 |
|
|
$ |
3,005 |
Depreciation and amortization |
$ |
5,696 |
|
|
$ |
6,307 |
Stock-based compensation |
$ |
6,046 |
|
|
$ |
5,744 |
Cash provided by operating activities |
$ |
15,773 |
|
|
$ |
7,526 |
|
|
|
|
|
|
|
Conference Call
The Company will host a conference call and
audio webcast to discuss the Company’s 2015 full-year and fourth
quarter financial results, certain business developments and
financial guidance for the first 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 #20249565 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 February 10, 2016, by dialing 855-859-2056 (Domestic) or
404-537-3406 (International) and entering the Conference ID
#20249565.
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, 2014, 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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