OraSure Announces 2014 Second Quarter Financial Results
BETHLEHEM, Pa., Aug. 6, 2014 (GLOBE NEWSWIRE) -- OraSure Technologies, Inc. (Nasdaq:OSUR), a market leader in oral fluid diagnostics, today announced its consolidated financial results for the three and six months ended June 30, 2014.
Financial Highlights
-- Consolidated net revenues for the second quarter of 2014 were $26.4 million, an 8% increase from the comparable quarter of 2013. Consolidated net revenues for the six months ended June 30, 2014 were $49.9 million, a 10% increase from the comparable period of 2013. These increases were primarily due to higher sales of the Company's OraQuick(R) HCV test, higher revenues from the Company's molecular collection systems subsidiary, DNA Genotek ("DNAG"), higher sales of the Company's cryosurgical systems products and higher licensing and product development revenues. -- Net revenues for the Company's OraQuick(R) rapid HCV test were $2.2 million and $3.8 million for the second quarter and first six months of 2014, respectively, an increase of 134% from each of the comparable 2013 periods. This growth reflects increasing demand for the product in both the domestic and international markets. -- Net revenues generated by DNAG during the second quarter of 2014 were $4.9 million, a 5% increase from the comparable period in 2013. DNAG net revenues during the six months ended June 30, 2014 were $10.7 million, a 24% increase from the comparable period in 2013. The increase in the quarter was the result of higher sales to academic customers while the increase for the six month period was the result of higher sales to both commercial and academic customers. -- Net cryosurgical systems revenues in the second quarter of 2014 were $4.9 million, an 18% increase over the second quarter of 2013. This increase was primarily due to higher sales in the international over-the-counter ("OTC") market. Net cryosurgical systems revenues for the six months ended June 30, 2014 were $8.9 million, a 22% increase over the comparable period of 2013. This increase was primarily due to higher sales in both the U.S. professional market and the international OTC market. -- Licensing and product development revenues were $775,000 for both the quarter and six months ended June 30, 2014, and represent the recognition of payments under the Company's' HCV collaboration with AbbVie. In exchange for exclusive promotion rights and certain services provided by the Company, the agreement with AbbVie provides for payments totaling up to $75.0 million over the life of the agreement, which runs through December 31, 2019. The first such payment of $15.0 million required under the agreement was received in July 2014. Licensing and product development revenues in 2013 represent royalties paid on domestic outsales of Merck's OTC cryosurgical wart removal product. -- Consolidated net income for the second quarter of 2014 was $2.5 million, or $0.04 per share on a fully diluted basis, which compares to a net loss of $5.3 million, or $0.10 per share, for the second quarter of 2013. Consolidated net loss for the six months ended June 30, 2014 was $3.1 million, or $0.06 per share, which compares to a net loss of $15.5 million, or $0.28 per share, for the comparable period of 2013. The improvement in the Company's bottom line for the quarter and six month period resulted primarily from the inclusion of a $5.5 million payment due under the terms of the termination of a drug assay collaboration with Roche Diagnostics, the higher revenues in each period and lower promotional costs for the OraQuick(R) In-Home HIV Test.
"We are pleased with the Company's financial performance for the second quarter and first six months of the year," said Douglas A. Michels, President and CEO of OraSure Technologies. "Sales of our OraQuick(R) HCV test were up nicely and our molecular collection systems business showed continued growth from the year ago periods. Significant effort is now being directed towards the execution of our HCV collaboration with AbbVie. We expect this collaboration will contribute substantially to our business in future periods."
Financial Results
Consolidated net product revenues for the second quarter of 2014 increased 6%, primarily as a result of higher sales of the Company's OraQuick(R) HCV, cryosurgical systems, and molecular collection systems products. These increases were partially offset by lower domestic sales of the OraQuick(R) professional HIV product, OraQuick(R) In-Home HIV test and insurance risk assessment products.
Consolidated net product revenues for the six month period ended June 30, 2014 increased 9% primarily as a result of higher sales of the Company's OraQuick(R) HCV, molecular collection systems and cryosurgical systems products. These increases were partially offset by lower domestic sales of the OraQuick(R) professional HIV product and lower substance abuse and insurance risk assessment product sales.
Consolidated licensing and product development revenues for the second quarter and first six months of 2014 were $775,000. Consolidated licensing and product development revenues for the second quarter and first six months of 2013 were $274,000 and $476,000, respectively. Licensing and product development revenues in 2014 represent the recognition of payments under the Company's HCV collaboration with AbbVie. Licensing and product development revenues in 2013 represent royalties paid on domestic outsales of Merck's OTC cryosurgical wart removal product.
Consolidated gross margin for the three and six months ended June 30, 2014 was 61% and 60%, respectively. Consolidated gross margin for the three and six months ended June 30, 2013 was 60% and 58%, respectively. Gross margin for the current quarter and six month period primarily benefited from a more favorable product mix due to higher margin DNAG sales.
Consolidated operating expenses decreased to $13.5 million during the second quarter of 2014 compared to $20.1 million in the comparable period of 2013. For the six months ended June 30, 2014, consolidated operating expenses were $33.1 million, a decrease from the $42.7 million reported for the six months ended June 30, 2013. The decrease for the second quarter of 2014 was primarily due to the inclusion of the $5.5 million Roche payment and lower promotional expenses associated with the Company's OraQuick(R) In-Home HIV test. These latter expenses totaled $3.0 million during the current quarter, compared to $5.4 million in the second quarter of 2013. The decrease for the six month period of 2014 was primarily due to the $5.5 million Roche payment, lower promotional expenses associated with the Company's OraQuick(R) In-Home HIV test and decreased research and development expenses due to lower clinical trial and staffing costs. Promotional expenses for the OraQuick(R) In-Home test were $7.6 million and $12.3 million for the first six months of 2014 and 2013, respectively. General and administrative expenses in the both the current and six month periods increased due to higher legal, staffing and consulting costs.
For the three and six months ended June 30, 2014, the Company recorded Canadian income tax benefits of $174,000 and $43,000, respectively. For the three and six months ended June 30, 2013, the Company recorded Canadian income tax benefits of $249,000 and $659,000, respectively. The tax benefits were recorded as a result of certain Canadian research and development and investment tax credits and DNAG's loss before income taxes.
The Company's cash and short-term investment balance totaled $80.3 million at June 30, 2014 compared to $93.2 million in cash at December 31, 2013. Working capital was $101.1 million at June 30, 2014 compared to $100.6 million at December 31, 2013. For the six months ended June 30, 2014, the Company used $10.4 million to fund operations.
Third Quarter 2014 Outlook
The Company expects consolidated net revenues to range from $27.0 to $27.5 million and is projecting a consolidated net loss of approximately $0.04 to $0.05 per share for the third quarter of 2014.
Financial Data
Condensed Consolidated Financial Data (In thousands, except per-share data) Unaudited ------------------------------------------------------------------------------ Three months ended Six months ended June 30, June 30, --------------------- ----------------------- 2014 2013 2014 2013 --------- ---------- ---------- ----------- Results of Operations Net revenues $ 26,401 $ 24,337 $ 49,938 $ 45,501 Cost of products sold 10,385 9,838 19,995 18,973 --------- ---------- ---------- ----------- Gross profit 16,016 14,499 29,943 26,528 --------- ---------- ---------- ----------- Operating expenses: Research and development 2,771 2,693 5,252 6,050 Sales and marketing 10,272 12,369 21,612 26,243 General and administrative 5,976 5,013 11,700 10,400 Gain on contract termination settlement (5,500) -- (5,500) -- --------- ---------- ---------- ----------- Total operating expenses 13,519 20,075 33,064 42,693 --------- ---------- ---------- -----------
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