OraSure Announces 2012 Third Quarter Financial Results

OraSure Announces 2012 Third Quarter Financial Results

BETHLEHEM, Pa., Nov. 7, 2012 (GLOBE NEWSWIRE) -- OraSure Technologies, Inc.
(Nasdaq:OSUR), a market leader in oral fluid diagnostics, today announced its
consolidated financial results for the third quarter and nine months ended
September 30, 2012.

Quarterly Highlights

  *Consolidated revenues were $22.1 million for the third quarter of 2012, a
    2% increase from the comparable quarter of 2011. Revenues for the current
    quarter included $3.3 million from the Company's molecular collection
    systems subsidiary, DNA Genotek Inc. ("DNAG"), acquired in August 2011.
    DNAG revenues from the August 17, 2011 acquisition date through September
    30, 2011 were $2.0 million.
  *Consolidated revenues were $65.7 million for the nine months ended
    September 30, 2012, a 13% increase from the comparable period of
    2011.Revenues for the current period included $10.0 million from DNAG
    operations compared to $2.0 million in the nine months ended September 30,
    2011.
  *On July 3, 2012, the FDA issued a pre-market approval for the Company's
    OraQuick^® In-Home HIV Test for sale into the over-the-counter ("OTC")
    market.The OraQuick^® In-Home HIV Test can detect antibodies to both
    HIV-1 and HIV-2 with an oral swab, providing a confidential in-home
    testing option with results in as little as 20 minutes. This is the first
    rapid diagnostic test for any infectious disease that has been approved by
    the FDA for sale over the counter.
  *During the last week of September 2012, the Company completed its first
    shipments of its OraQuick® In-Home HIV test to various retailers.No
    revenue was recorded related to these shipments as revenue will be
    deferred until consummation of sales to retail customers either in a store
    or over the internet. Approximately $3.6 million was recorded for this
    product in accounts receivable and accrued in deferred revenue as of
    September 30, 2012.
  *Consolidated net loss for the third quarter of 2012 was $2.4 million, or
    $0.04 per share, which compares to a net loss of $3.9 million, or $0.08
    per share, for the third quarter of 2011.The third quarter 2011 net loss
    included $2.1 million of transaction related costs and a $763,000 purchase
    accounting adjustment associated with the acquisition of DNAG.
  *Consolidated net loss for the nine months ended September 30, 2012 was
    $9.2 million, or $0.18 per share, which compares to a net loss of $9.0
    million, or $0.19 per share, for the nine months ended September 30, 2011.

"The third quarter included historic achievements for our Company," said
Douglas A. Michels, President and Chief Executive Officer of OraSure
Technologies. "We began the quarter with the receipt of FDA approval for our
OraQuick^® In-Home HIV Test, making it the first and only rapid infectious
disease test ever approved for OTC sale, and we ended with the completion of
our first shipments of this product to retailers around the country. We also
commenced the commercial launch of this product in October with the initiation
of a robust promotional campaign to build product and brand awareness on a
national basis. We intend to continue to devote the time and resources needed
to maximize both the public health benefits and market potential of this
important new product."

Financial Results

Product revenues for the quarter and the nine month period ended September 30,
2012 increased 1% and 12%, respectively, primarily as a result of higher
molecular collection system sales and higher sales of the Company's
cryosurgical systems products.These increases were partially offset by lower
sales of the Company's infectious disease testing, substance abuse testing and
insurance risk assessment products.

Licensing and product development revenues for the third quarter of 2012
increased $108,000, or 39%, reflecting royalties received under a license
related to the Company's cryosurgical patents.Licensing and product
development revenues for the nine months ended September 30, 2012 increased by
$863,000, or 86%, primarily as a result of a $1.0 million milestone payment
received under the terms of the Company's HCV collaboration agreement with
Merck, partially offset by lower royalties related to the Company's
cryosurgical patents.

Consolidated gross margin for the three and nine months ended September 30,
2012 and 2011 was 63% and 64%, respectively.

Consolidated operating expenses decreased to $16.8 million in the third
quarter of 2012 from $17.8 million in the comparable period of 2011.For the
nine months ended September 30, 2012, consolidated operating expenses were
$52.4 million, an increase over the $46.2 million reported for the nine months
ended September 30, 2011.

The decrease in operating expenses for the third quarter of 2012 was the
result of lower clinical trial costs related to the Company's OraQuick®
In-Home HIV test and lower general and administrative expenses caused by the
absence in the current period of $2.1 million of DNAG transaction costs
incurred during the third quarter of 2011.These decreases in expenses were
partially offset by $1.8 million of additional sales and marketing costs
related to the commercialization of the Company's OraQuick® In-Home HIV test
and the inclusion of a full quarter of DNAG operating expenses in the third
quarter of 2012.

The increase in operating expense for the nine months ended September 30, 2012
resulted from the inclusion of DNAG operating expenses for the full nine
months in 2012, an additional $4.7 million of sales and marketing costs
related to the OraQuick® In-Home HIV Test commercialization and higher
staffing costs included in general and administrative expenses. These
increases were partially offset by lower clinical trial costs related to the
Company's OraQuick^® In-Home HIV Test and lower consulting and legal fees
reflecting the absence of $2.5 million of DNAG transaction costs incurred in
2011.

For the three and nine months ended September 30, 2012, the Company recorded
an income tax benefit of $527,000 and $1.1 million, respectively, associated
with the DNAG loss before income taxes and certain Canadian research and
development and investment tax credits.The income tax benefit recorded for
the nine month period was negatively impacted by a second quarter adjustment
to the Company's Canadian deferred tax liability to reflect a change in
enacted Canadian provincial income tax rates.

Cash totaled $89.4 million at September 30, 2012 compared to $23.9 million at
December 31, 2011.Working capital was $106.6 million at September 30, 2012
compared to $30.9 million at December 31, 2011.On July 11, 2012, the Company
completed a secondary offering of 6.1 million shares of its common stock,
resulting in net proceeds of $70.3 million after expenses of the offering.

Fourth Quarter 2012 Outlook

The Company expects total consolidated revenues to range from $20.5 to $21.0
million and is projecting a consolidated net loss of approximately $0.13 -
$0.15 per share for the fourth quarter of 2012.

Financial Data

Condensed Consolidated Financial Data
(In thousands, except per-share data)
                                                         
                           Unaudited
                                                
                           Three months ended    Nine months ended
                           September 30,         September 30,
                           2012       2011       2012       2011
Results of Operations                                     
Revenues                    $22,115  $21,714  $65,675  $58,191
Cost of products sold       8,227     8,120     23,356    21,070
Gross profit               13,888    13,594    42,319    37,121
Operating expenses:                                       
Research and development   2,994     5,546     9,551     15,110
Sales and marketing        8,602     5,742     25,490    16,026
General and administrative 5,220     6,510     17,398    15,103
Total operating expenses   16,816    17,798    52,439    46,239
Operating loss             (2,928)   (4,204)   (10,120)  (9,118)
Other expense               (34)      (30)      (267)     (153)
Loss before income taxes    (2,962)   (4,234)   (10,387)  (9,271)
Income tax benefit          (527)     (315)     (1,138)   (315)
Net loss                   $(2,435) $(3,919) $(9,249) $(8,956)
Loss per share:                                           
Basic and Diluted          $(0.04)  $(0.08)  $(0.18)  $(0.19)
                                                         
Weighted average shares:                                  
Basic and Diluted          54,441     47,028     50,177     46,788
                                                         

Summary of Revenues by Market and Product (Unaudited)

                             Three Months Ended September 30,
                             Dollars                     Percentage of Total
                                                           Revenues
Market                        2012      2011      % Change 2012      2011
                                                                
Infectious disease testing    $10,717 $11,854 (10)%    48%       55%
Substance abuse testing       2,331    2,765    (16)     11        13
Cryosurgical systems          4,199    3,395    24       19        16
Molecular collection systems  3,353    2,022    66       15        9
Insurance risk assessment     1,128    1,399    (19)     5         6
Product revenues              21,728   21,435   1        98        99
Licensing and product         387      279      39       2         1
development
Total revenues                $22,115 $21,714 2%       100%      100%

                             
                             Nine Months Ended September 30,
                             Dollars                     Percentage of Total
                                                           Revenues
Market                        2012      2011      % Change 2012      2011
                                                                
Infectious disease testing    $30,880 $33,100 (7)%     47%       57%
Substance abuse testing       7,305    9,011    (19)     11        16
Cryosurgical systems          12,181   8,907    37       19        15
Molecular collection systems  9,992    2,022    394      15        3
Insurance risk assessment     3,448    4,145    (17)     5         7
Product revenues              63,806   57,185   12       97        98
Licensing and product         1,869    1,006    86       3         2
development
Total revenues                $65,675 $58,191 13%      100%      100%

                                                 
                     Three Months Ended           Nine Months Ended
                     September 30,               September 30,
OraQuick^® Revenues   2012      2011      % Change 2012     2011      % Change
                                                                
Domestic HIV          $8,527  $ 10,010 (15)%    $25,106 $28,948 (13)%
International HIV     884      878      1        2,287   2,290    −
Domestic HCV          678      332      104      1,958   464      322
International HCV     241      93       159      734     284      158
Total OraQuick®       $ 10,330 $ 11,313 (9)%     $30,085 $31,986 (6)%
revenues

                                                  
                        Three Months Ended         Nine Months Ended
                        September 30,             September 30,
Intercept^® Revenues     2012     2011     % Change 2012     2011     % Change
                                                                
Domestic                 $ 1,499 $ 1,947 (23)%    $ 4,981 $ 5,909 (16)%
International            279     438     (36)     616     1,472   (58)
Total Intercept®         $ 1,778 $ 2,385 (25)%    $ 5,597 $ 7,381 (24)%
revenues

                                                 
                       Three Months Ended         Nine Months Ended
                       September 30,             September 30,
Cryosurgical Systems    2012     2011     % Change 2012      2011     % Change
Revenues
                                                                
Professional domestic   $ 2,025 $ 2,042 (1)%     $5,342  $5,097 5%
Professional            453     402     13       1,110    989     12
international
Over-the-Counter        1,721   951     81       5,729    2,821   103
Total cryosurgical      $ 4,199 $ 3,395 24%      $12,181 $8,907 37%
systems revenues
                                                                

Condensed Consolidated Balance            September 30, 2012 December 31, 2011
Sheets(Unaudited)
Assets                                                      
                                         $89,415          $23,878
Cash
Accounts receivable, net                  19,310            17,159
Inventories                               12,845            9,621
Other current assets                      2,037             2,178
Property and equipment, net               18,811            19,855
Intangible assets, net                    28,351            30,383
Goodwill                                  25,682            24,740
Other non-current assets                  105               47
Total assets                             $196,556         $127,861
                                                           
Liabilities and Stockholders' Equity                        
Current portion of long-term debt         $--             $7,292
Accounts payable                          5,132             4,142
Accrued expenses                          11,867            10,542
Other liabilities                         67                --
Deferred income taxes                     4,705             5,636
Stockholders' equity                      174,785           100,249
Total liabilities and stockholders'      $196,556         $127,861
equity
                                                           

                                                      Nine months ended
                                                      September 30,
Additional Financial Data(Unaudited)                  2012      2011
                                                               
Capital expenditures                                   $1,402  $1,806
Net proceeds from public offering                      $70,293 $--
Acquisition of DNA Genotek, Inc., net of cash acquired $--    $49,973
Depreciation and amortization                          $5,455  $3,011
Stock based compensation                               $3,845  $3,016
Cash used in operating activities                      $4,006  $4,079

Conference Call

The Company will host a conference call and audio webcast to discuss the
Company's 2012 third quarter financial results, business developments and
financial guidance for the fourth quarter of 2012, 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 877-348-9357
(Domestic) or 970-315-0488 (International) and reference Conference ID
#51186733, or go to OraSure Technologies' web site, www.orasure.com, and click
on the Investor Info link. 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 November 14,
2012, by dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and
entering the Conference ID #51186733.

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. In July 2012, the Company received approval from the U.S. Food and
Drug Administration for the Company's OraQuick® In-Home HIV Test for sale
directly to consumers in the over-the-counter (OTC) market – making it the
first and only rapid OTC HIV test approved 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 OraSure Technologies, please visit
www.orasure.com.

The OraSure Technologies, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6440

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 an 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; 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 or minimum purchase requirements for the Company's
products; impact of replacing distributors and success of direct sales
efforts; inventory levels at distributors and other customers; ability to
integrate and realize the full benefits of the Company's acquisition of DNA
Genotek; ability of DNA Genotek to achieve its financial and strategic
objectives; ability to identify, complete, integrate and realize the full
benefits of future acquisitions; impact of competitors, competing products and
technology changes; impact of the economic downturn, 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, including the
OraQuick® In-Home HIV Test; market acceptance of oral fluid testing or other
products; changes in market acceptance of products based on product
performance, extended shelf life or other factors; 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 product 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 our 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 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, 2011, 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.

CONTACT: Ronald H. Spair
         Chief Financial Officer
         610-882-1820
         Investorinfo@orasure.com
         www.orasure.com

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