OraSure Announces Full-Year and Fourth Quarter 2014 Financial Results
Wed February 4, 2015 4:00 PM|GlobeNewswire | About: OSUR
BETHLEHEM, Pa., Feb. 4, 2015 (GLOBE NEWSWIRE) -- OraSure Technologies, Inc. ( OSUR), a market leader in oral fluid diagnostics, today announced its consolidated financial results for the full-year and fourth quarter ended December 31, 2014.
Financial Highlights
- The Company exceeded $100 million in annual revenues for the first time in its history. Consolidated net revenues for the year ended December 31, 2014 were $106.5 million, an 8% increase from the comparable period of 2013.
- Consolidated net revenues for the fourth quarter of 2014 were $28.7 million, which approximated the level of revenues reported in the fourth quarter of 2013.
- Licensing and product development revenues were $3.4 million and $7.6 million for the quarter and year ended December 31, 2014, respectively, and represent the recognition of payments under the Company's' HCV collaboration with AbbVie.
- Net revenues generated by the Company's molecular collection systems subsidiary, DNA Genotek ("DNAG"), were $6.3 million and $23.8 million for the fourth quarter and full-year of 2014, respectively, representing an 8% decrease and a 17% increase over the fourth quarter and full-year of 2013, respectively. DNAG accounted for 22% of the Company's aggregate 2014 consolidated net revenues.
- Net revenues for the Company's OraQuick® rapid HCV test were $1.7 million and $7.3 million for the fourth quarter and full-year of 2014, respectively, representing a 10% decrease and a 42% increase over the fourth quarter and full-year of 2013, respectively.
- Consolidated net loss for the fourth quarter of 2014 was $2.7 million, or $0.05 per share, which compares to net income of $6.2 million, or $0.11 per share, for the fourth quarter of 2013. This change in the current quarter bottom line performance was primarily the result of the absence of an $8.3 million contract termination payment received in the prior year period. Consolidated net loss for the year ended December 31, 2014 was $4.6 million, or $0.08 per share, which compares to a net loss of $11.2 million, or $0.20 per share, for the comparable period of 2013.
- Cash and short term investments totaled $97.9 million and working capital amounted to $104.8 million at December 31, 2014.
"Crossing the $100 million threshold in annual revenues has been a long-term goal and is a significant milestone for our Company," said Douglas A. Michels, President and CEO of OraSure Technologies. "The molecular collection systems segment continues to deliver strong results and our HCV business continues to grow. Our immediate focus is on increasing usage of our OraQuick® HCV test under our HCV collaboration with AbbVie, continuing the strong performance at DNA Genotek, and pursuing a potential rapid Ebola test, including securing development funding and purchase commitments for this proposed new product."
Financial Results
Consolidated net product revenues for the fourth quarter of 2014 decreased 12% from the comparable period of 2013, primarily as a result of the change in revenue recognition policy related to the Company's OraQuick® In-Home HIV test which increased fourth quarter 2013 net revenues by $2.5 million. Consolidated net product revenues for the year ended December 31, 2014 increased 1% over the prior year period, primarily as a result of higher sales of the Company's molecular collection systems, OraQuick® HCV and cryosurgical systems products. These increases were partially offset by lower sales of the OraQuick® professional HIV product line and OraQuick® In-Home HIV test. OraQuick® HIV In-Home revenues in 2013 included the $2.5 million non-recurring favorable adjustment resulting from the accounting policy change.
Consolidated licensing and product development revenues for the fourth quarter and full-year of 2014 were $3.4 million and $7.6 million, respectively. Consolidated licensing and product development revenues for the fourth quarter and full-year of 2013 were $0 and $623,000, respectively. Licensing and product development revenues in 2014 represent the recognition of exclusivity payments under the Company's HCV collaboration agreement with AbbVie. Licensing and product development revenues in 2013 represent royalties paid on domestic outsales of a licensee's OTC cryosurgical wart removal product, pursuant to a license agreement that expired in that same year.
Consolidated gross margin for both the three months and year ended December 31, 2014 was 63%. Consolidated gross margin for the three months and year ended December 31, 2013 was 60% and 59%, respectively. Gross margin for the current quarter improved largely as a result of the increased licensing and product development revenues and a more favorable product mix resulting from higher margin DNAG sales, partially offset by a decline in overhead absorption as a result of facility equipment replacements. Gross margin for the full-year 2014 also improved largely due to the increased licensing and product development revenues and higher margin DNAG sales.
Consolidated operating expenses increased to $20.5 million during the fourth quarter of 2014 compared to $11.1 million in the comparable period of 2013. This increase was primarily due to the absence of an $8.3 million contract termination payment from Roche Diagnostics which was received in the fourth quarter of 2013. This payment, coupled with lower promotional expenses associated with the Company's OraQuick® In-Home HIV test, were partially offset by increased expenses incurred under the HCV collaboration with AbbVie , higher research and development costs and higher staffing expenses. Promotional expenses for the OraQuick® In-Home HIV test were $614,000 and $4.6 million for the fourth quarters of 2014 and 2013, respectively.
For the year ended December 31, 2014, consolidated operating expenses increased to $71.4 million from the $70.8 million reported for the prior year. This increase was primarily due to a $2.8 million reduction in contract termination payments received from Roche Diagnostics during 2014, increased expenses incurred under the HCV collaboration with AbbVie, higher research and development costs, and higher legal, staffing and consulting costs, partially offset by lower promotional expenses associated with the Company's OraQuick® In-Home HIV test. Full-year promotional expenses for the OraQuick® In-Home HIV test were $8.5 million and $18.8 million for 2014 and 2013, respectively.
For the three months and year ended December 31, 2014, the Company recorded Canadian income tax expense of $376,000 and $343,000, respectively. For the three months and year ended December 31, 2013, the Company recorded Canadian income tax expense of $14,000 and a Canadian income tax benefit of $772,000 respectively. The 2013 full-year tax benefit was the result of certain Canadian research and development and investment tax credits and DNAG's loss before income taxes in that period.
The Company's cash and short-term investment balance totaled $97.9 million at December 31, 2014 compared to $93.2 million in cash at December 31, 2013. Working capital was $104.8 million at December 31, 2014 compared to $100.6 million at December 31, 2013. For the year ended December 31, 2014, the Company's consolidated operations generated $7.5 million of cash.
First Quarter 2015 Outlook
The Company expects consolidated net revenues to range from $26.5 to $27.0 million and is projecting a consolidated net loss of approximately $0.01 to $0.02 per share for the first quarter of 2015.
Financial Data
| Condensed Consolidated Financial Data | | (In thousands, except per-share data) | | | | | | | | Unaudited | | | | | | | | | Three months ended | Year ended | | | December 31, | December 31, | | | 2014 | 2013 | 2014 | 2013 | | Results of Operations | | | | | | Net revenues1 | $ 28,681 | $ 28,768 | $ 106,464 | $ 98,940 | | Cost of products sold | 10,704 | 11,640 | 39,840 | 40,351 | | Gross profit | 17,977 | 17,128 | 66,624 | 58,589 | | Operating expenses: | | | | | | Research and development | 3,817 | 2,212 | 12,058 | 10,932 | | Sales and marketing | 10,290 | 11,241 | 41,118 | 46,465 | | General and administrative | 6,433 | 5,912 | 23,750 | 21,654 | | Gain on contract termination settlement | -- | (8,300) | (5,500) | (8,300) | | Total operating expenses | 20,540 | 11,065 | 71,426 | 70,751 | | Operating income (loss) | (2,563) | 6,063 | (4,802) | (12,162) | | Other income (expense) | 287 | 164 | 531 | 200 | | Income (loss) before income taxes | (2,276) | 6,227 | (4,271) | (11,962) | | Income tax expense (benefit) | 376 | 14 | 343 | (772) | | Net income (loss) | $ (2,652) | $ 6,213 | $ (4,614) | $ (11,190) | | Earnings (loss) per share: | | | | | | Basic and Diluted | $ (0.05) | $ 0.11 | $ (0.08) | $ (0.20) | | | | | | | | Weighted average shares: | | | | | | Basic | 56,105 | 55,616 | 55,949 | 55,555 | | Diluted | 56,105 | 56,176 | 55,949 | 55,555 | | _________________ |
| 1Net revenues for the three months and year ended December 31, 2013 include a non-recurring net favorable $2.5 million adjustment to reflect a change in the Company's revenue recognition policy related to its OraQuick® In-Home HIV test. |
Summary of Net Revenues by Market and Product (Unaudited)
| | Three Months Ended December 31, | | | | | Percentage of | | | | | Total Net | | | Dollars | | Revenues | | | | | % | | | | Market | 2014 | 2013 | Change | 2014 | 2013 | | | | | | | | | Infectious disease testing | $ 12,602 | $ 15,436 | (18)% | 44% | 54% | | Substance abuse testing | 2,250 | 2,116 | 6 | 8 | 7 | | Cryosurgical systems | 3,377 | 3,558 | (5) | 11 | 12 | | Molecular collection systems | 6,255 | 6,831 | (8) | 22 | 24 | | Insurance risk assessment | 800 | 827 | (3) | 3 | 3 | | Net product revenues | 25,284 | 28,768 | (12) | 88 | 100 | | Licensing and product development | 3,397 | -- | NM* | 12 | -- | | Net revenues | $ 28,681 | $ 28,768 | (0)% | 100% | 100% | | | | | | | |
| | Year Ended December 31, | | | | | Percentage of | | | | | Total Net | | | Dollars | | Revenues | | | | | % | | | | Market | 2014 | 2013 | Change | 2014 | 2013 | | | | | | | | | Infectious disease testing | $ 47,515 | $ 50,961 | (7)% | 45% | 51% | | Substance abuse testing | 8,437 | 8,571 | (2) | 8 | 9 | | Cryosurgical systems | 15,505 | 14,468 | 7 | 15 | 14 | | Molecular collection systems | 23,778 | 20,381 | 17 | 22 | 21 | | Insurance risk assessment | 3,659 | 3,936 | (7) | 3 | 4 | | Net product revenues | 98,894 | 98,317 | 1 | 93 | 99 | | Licensing and product development | 7,570 | 623 | NM* | 7 | 1 | | Net revenues | $ 106,464 | $ 98,940 | 8% | 100% | 100% | | | | | | | | | * Calculation is not considered meaningful | | | | | | | |
| | Three Months Ended | Year Ended | | | December 31, | December 31, | | | | | % | | | % | | OraQuick® Revenues | 2014 | 2013 | Change | 2014 | 2013 | Change | | | | | | | | | | Domestic HIV | $ 8,363 | $ 8,447 | (1)% | $ 29,933 | $ 32,301 | (7)% | | International HIV | 587 | 907 | (35) | 2,483 | 3,365 | (26) | | Domestic HIV OTC1 | 1,502 | 3,909 | (62) | 6,493 | 9,106 | (29) | | Net HIV revenues | 10,452 | 13,263 | (21) | 38,909 | 44,772 | (13) | | | | | | | | | | Domestic HCV | 1,036 | 1,073 | (3) | 4,220 | 2,847 | 48 | | International HCV | 707 | 860 | (18) | 3,048 | 2,268 | 34 | | Net HCV revenues | 1,743 | 1,933 | (10) | 7,268 | 5,115 | 42 | | | | | | | | | | Net OraQuick® revenues | $ 12,195 | $ 15,196 | (20)% | $ 46,177 | $ 49,887 | (7)% | | | | | | | | |
| | Three Months Ended | Year Ended | | | December 31, | December 31, | | | | | % | | | % | | Intercept® Revenues | 2014 | 2013 | Change | 2014 | 2013 | Change | | | | | | | | | | Domestic | $ 1,629 | $ 1,453 | 12% | $ 6,101 | $ 5,693 | 7% | | International | 73 | 115 | (37) | 149 | 500 | (70) | | Net Intercept® revenues | $ 1,702 | $ 1,568 | 9% | $ 6,250 | $ 6,193 | 1% | | | | | | | | |
| | Three Months Ended | Year Ended | | | December 31, | December 31, | | | | | % | | | % | | Cryosurgical Systems Revenues | 2014 | 2013 | Change | 2014 | 2013 | Change | | | | | | | | | | Domestic professional | $ 2,149 | $ 1,828 | 18% | $ 6,750 | $ 6,020 | 12% | | International professional | 111 | 402 | (72) | 693 | 1,441 | (52) | | Domestic over-the-counter | 108 | -- | 100 | 108 | -- | 100 | | International over-the-counter | 1,009 | 1,328 | (24) | 7,954 | 7,007 | 14 | | Net cryosurgical systems revenues | $ 3,377 | $ 3,558 | (5)% | $ 15,505 | $ 14,468 | 7% | | _________________ |
| 1Net revenues for the three months and year ended December 31, 2013 include a non-recurring net favorable $2.5 million adjustment to reflect a change in the Company's revenue recognition policy related to its OraQuick® In-Home HIV test. |
| Condensed Consolidated Balance Sheets (Unaudited) | | | | | December 31, 2014 | December 31, 2013 | | Assets | | | | Cash | $ 92,867 | $ 93,191 | | Short-term investments | 5,000 | -- | | Accounts receivable, net | 16,138 | 12,957 | | Inventories | 15,763 | 11,444 | | Other current assets | 1,446 | 1,983 | | Property and equipment, net | 17,934 | 17,933 | | Intangible assets, net | 17,505 | 22,226 | | Goodwill | 21,734 | 23,782 | | Other non-current assets | 1,246 | 729 | | Total assets | $ 189,633 | $ 184,245 | | | | | | Liabilities and Stockholders' Equity | | | | Accounts payable | $ 7,148 | $ 4,834 | | Deferred revenue | 8,043 | 1,119 | | Accrued expenses | 11,271 | 13,032 | | Other non-current liabilities | 1,234 | 677 | | Deferred income taxes | 3,236 | 3,437 | | Stockholders' equity | 158,701 | 161,146 | | Total liabilities and stockholders' equity | $ 189,633 | $ 184,245 | | | | | | | | |
| | Year ended | | | December 31, | | Additional Financial Data (Unaudited) | 2014 | 2013 | | | | | | Capital expenditures | $ 3,005 | $ 2,462 | | Depreciation and amortization | $ 6,307 | $ 6,552 | | Stock based compensation | $ 5,744 | $ 5,572 | | Cash provided by operating activities | $ 7,526 | $ 8,385 | | | | |
Conference Call
The Company will host a conference call and audio webcast to discuss the Company's 2014 full-year and fourth quarter financial results, certain business developments and financial guidance for the first quarter of 2015, 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 #63824420 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 11, 2015, by dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and entering the Conference ID #63824420.
About OraSure Technologies
OraSure Technologies is a leader in the development, manufacture and distribution of oral fluid diagnostic and collection devices and other technologies designed to detect or diagnose critical medical conditions. Its innovative products include rapid tests for the detection of antibodies to HIV and HCV at the point of care and testing solutions for detecting various drugs of abuse. The Company sells the OraQuick® In-Home HIV Test, the first and only rapid HIV test approved by the U.S. Food and Drug Administration for sale to the consumer over-the-counter market in the U.S. In addition, the Company is a leading provider of oral fluid sample collection, stabilization and preparation products for molecular diagnostic applications. 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, and commercial and industrial entities. The Company's products enable healthcare providers to deliver critical information to patients, empowering them to make decisions to improve and protect their health. For more information on the Company, please visit www.orasure.com
Important Information
This press release contains certain forward-looking statements |
