MEDTOX Scientific Announces Results for Fourth Quarter and Year-End
ST. PAUL, Minn., March 2 /PRNewswire-FirstCall/ -- MEDTOX
Scientific, Inc. announced today fourth-quarter and year-end
revenues and earnings for the periods ending December 31, 2003. For
the three-month period, revenues were $12,277,000, compared to
$12,123,000 from the prior-year period. The Company recorded income
from operations for the quarter of $167,000 compared to a loss from
operations of ($107,000) for the prior-year period. The Company
recorded a net loss of ($238,000) for the three-month period
compared to a net loss of ($1,076,000) for the prior-year period.
For the twelve-month period, revenues were $51,473,000, compared to
$52,024,000 for the prior-year period. The Company recorded a net
loss of ($308,000) for 2003 compared to net income of $11,737,000
for 2002. The Company recorded a $10,150,000 non-cash tax benefit
as part of net income in 2002. "We are encouraged by the results of
the quarter," said Dick Braun, chief executive officer of MEDTOX.
"Sample volume from the Company's existing workplace drug testing
clients, though not yet at the previous year's level, showed
improvement again this quarter. Volume from new workplace drugs of
abuse clients also continued to be strong in the quarter, resulting
in an increase in workplace drugs of abuse sample volume of 3.7%
over the fourth quarter last year. "Additionally, we continued to
see positive net results from our LEAN projects, staff reductions
andexpense control measures," said Braun. "In spite of $249,000 in
LEAN consulting and severance expense in the quarter, gross margin
for the quarter improved to 38.2% compared to 36.0% for the same
period in 2002, and selling, general and administrativeexpenses
improved to 31.3% of revenues, or $3,844,000, compared to 34.4% of
revenues, or $4,165,000 for the prior-year, a reduction in spending
of 7.7%. R&D expenses of $677,000 in the quarter continued to
run higher than the previous year and included recruiting and
hiring costs associated with the addition of Dr. Robert C. Bohannon
as Vice President of Technology, Research and Development in our
Diagnostic Product Division, as well as severance and other costs
associated with reorganization of thedepartment. R&D expenses
are expected to run between $450,000 and $500,000 per quarter for
2004." The Company's steps to reduce costs and improve operating
efficiencies positively impacted the second half of 2003. Although
revenues remained level at$25.8 million compared to $25.6 million
for the six-month periods ended December 31, 2003 and June 30,
2003, respectively, the Company experienced an improved gross
margin rate of 1% and an increase in income from operations to
$1,069,000 in the last six months of the year from $252,000 in the
first half of the year, or 324%. Operating improvements in 2003
have also positively impacted the Company's balance sheet at
December 31, 2003 compared to December 31, 2002. With a 1%
differential in year over year annual sales, accounts receivable
have been reduced from $9,398,000 to $8,367,000, or 11%;
inventories have also been reduced from $4,395,000 to $3,564,000,
or 19%; and long-term obligations have been reduced from $9,007,000
to $7,639,000, a reduction of $1,368,000 or 15%. Cash flow
generated by operating activities was $3,157,000 in 2003. Margin
improvement and a lower operating expense rate should have a
positive impact in 2004. With the prospects of the strengthening
economy creating an opportunity for job growth, coupled with
continuing new sales growth, the Company is optimistic with respect
to 2004 results. MEDTOX will hold a teleconference to discuss
fourth quarter and year-end results today at 9:30 a.m. Central Time
(10:30 a.m. Eastern). Dialing 800-387-5648 a few minutes prior to
the scheduled start time on March 2 will access a listen-only
broadcast of the teleconference. International callers may access
the call by dialing 706-634-5527. Callers should ask for the MEDTOX
quarterly conference call, hosted by Dick Braun, president and CEO
of MEDTOX. A simultaneous webcast of the conference call will be
available on the MEDTOX website in the "investors" section at
http://www.medtox.com/. An audio replay of the conference call will
be available through March 9 at 800-642- 1687 Conference ID #
5489284. International callers may access the replay at
706-645-9291 with the same Conference ID #. MEDTOX Scientific,
Inc., headquartered in St. Paul, Minn., is a provider of high
quality specialized laboratory and on-site/point-of-collection
(POC) devices. The company also supports customers with complete
logistics, data and program management services. MEDTOX develops
and manufactures diagnostic devices for quick and economical
on-site/point-of-collection analysis for drugs of abuse,
therapeutic drugs and biological and agricultural toxins and
provides employment drug screening and occupational health testing.
MEDTOX is a leader in providing esoteric laboratory testing
servicesto hospitals and laboratories nationwide. This includes
both central laboratory and bio- analytical testing for
pharmaceutical clinical trials. For more information see
http://www.medtox.com/ . Note: Forward-looking statements contained
in this press release are made under the Private Securities Reform
Act of 1995. Actual results may differ due to a number of factors
including a change in the employment pattern of client companies,
the ability of MEDTOX to acquire new business, and changes in the
competitive environment. Further discussions of factors that may
cause such results to differ are identified on page three of the
Company's 2002 annual report on Form 10-K and incorporated herein
by reference. MEDTOX SCIENTIFIC, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS (Dollars in thousands except per share amounts)
(unaudited) Three Months Ended Twelve Months Ended December 31,
December 31, 2003 2002 2003 2002 REVENUES: Laboratory services
$9,414 $9,234 $39,424 $39,673 Product sales 2,863 2,889 12,049
12,351 12,277 12,123 51,473 52,024 COST OF REVENUES: Cost of
services 6,351 6,608 26,357 26,792 Cost of sales 1,238 1,145 5,163
4,684 7,589 7,753 31,520 31,476 GROSS PROFIT 4,688 4,370 19,953
20,548 OPERATING EXPENSES: Selling, general and administrative
3,844 4,165 16,722 16,317 Research and development 677 312 1,910
1,217 4,521 4,477 18,632 17,534 INCOME (LOSS) FROM OPERATIONS 167
(107) 1,321 3,014 OTHER INCOME (EXPENSE): Interest expense, net
(271) (319) (1,147) (1,344) Other expense, net (119) (17) (482)
(83) (390) (336) (1,629) (1,427) INCOME (LOSS) BEFORE INCOME TAX
BENEFIT (EXPENSE) (223) (443) (308) 1,587 INCOME TAX BENEFIT
(EXPENSE) (15) (633) - 10,150 NET INCOME (LOSS) $(238) $(1,076)
$(308) $11,737 BASIC EARNINGS (LOSS) PER COMMON SHARE $(0.05)
$(0.22) $(0.06) $2.45 DILUTED EARNINGS (LOSS) PER COMMON SHARE
$(0.05) $(0.22) $(0.06) $2.34 WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: Basic 4,979,655 4,811,340 4,942,617 4,798,098 Diluted
4,979,655 4,811,340 4,942,617 5,011,330 MEDTOX SCIENTIFIC, INC.
CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (unaudited)
December 31, December 31, 2003 2002 ASSETS Cash and cash
equivalents $711 $439 Accounts receivable 8,367 9,398 Inventories
3,564 4,395 Other current assets 2,664 2,018 Total current assets
15,306 16,250 Building, equipment and improvements, net 15,092
14,769 Other assets 26,120 27,036 Total assets $56,518 $58,055
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $13,809
$14,164 Long-term obligations 7,639 9,007 Stockholders' equity
35,070 34,884 Total liabilities and stockholders' equity $56,518
$58,055 DATASOURCE: MEDTOX Scientific, Inc. CONTACT: Stephen
Anderson of MEDTOX Scientific, Inc., +1-877-715-7236 Web site:
http://www.medtox.com/
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