OraSure Announces Full-Year and Fourth Quarter 2012 Financial Results

OraSure Announces Full-Year and Fourth Quarter 2012 Financial Results

BETHLEHEM, Pa., Feb. 6, 2013 (GLOBE NEWSWIRE) -- OraSure Technologies, Inc.
(Nasdaq:OSUR), a market leader in oral fluid diagnostics, today announced its
consolidated financial results for the full-year and fourth quarter of 2012.

Quarterly Highlights

  *Consolidated net revenues were $87.8 million for the full-year 2012, a 7%
    increase from the comparable period of 2011. Net revenues for the current
    period included $14.3 million from the Company's molecular collection
    systems subsidiary, DNA Genotek Inc. ("DNAG"), acquired in August 2011.
    DNAG net revenues from the August 17, 2011 acquisition date through
    December 31, 2011 were $6.2 million.
    
  *Consolidated net revenues were $22.1 million for the fourth quarter of
    2012, a 7% decrease from the comparable quarter of 2011.This decrease was
    primarily the result of lower sales of the Company's substance abuse
    testing and cryosurgical systems products.
    
  *Consolidated net loss for the year ended December 31, 2012 was $15.1
    million, or $0.29 per share, which compares to a net loss of $8.8 million,
    or $0.19 per share, for 2011.The full-year net loss for 2012 included
    $9.9 million in costs associated with the commercialization of the
    Company's OraQuick® In-Home HIV test.
    
  *Consolidated net loss for the fourth quarter of 2012 was $5.9 million, or
    $0.11 per share, which compares to net income of $115,000, or $0.00 per
    share, for the fourth quarter of 2011.The fourth quarter 2012 net loss
    included $5.2 million in costs associated with the OraQuick® In-Home HIV
    test commercialization.
    
  *Included in the 2012 full-year and fourth quarter revenues were gross
    sales of the OraQuick® In-Home test of $902,000, which were reduced by
    trade spend, cash discounts and an estimate for returns and allowances
    resulting in net revenues of $546,000 recorded for each period.Revenue
    for this product is recognized upon the consummation of a sale to a retail
    customer either in a store or over the internet.
    
  *Cash totaled $87.9 million at December 31, 2012 compared to $23.9 million
    at December 31, 2011.

"The highlight of 2012 was the receipt of FDA approval of our OraQuick®
In-Home test," said Douglas A. Michels, President and CEO of OraSure
Technologies."We now have the first and only rapid HIV test available for use
by consumers. During the fourth quarter, we launched our national public
relations and advertising campaign and began selling this product to retailers
across the country.Apart from the commercial opportunity for our Company, we
believe the OraQuick® In-Home HIV test will significantly benefit public
health by offering individuals who might not otherwise get tested a simple and
confidential way to learn their HIV status in the comfort of their own homes."

Financial Results

Net product revenues for the year ended December 31, 2012 increased 6%
primarily as a result of a full year of molecular collection system sales and
higher cryosurgical systems sales.These increases were partially offset by
lower sales of the Company's infectious disease testing, substance abuse
testing and insurance risk assessment products. Product revenues for the
quarter ended December 31, 2012 decreased 7% primarily as a result of lower
sales of the Company's substance abuse testing and cryosurgical systems
products.These decreases were partially offset by higher sales of infectious
disease testing and molecular collection systems products.

Licensing and product development revenues for the year ended December 31,
2012 increased to $2.1 million from $1.2 million for the full-year of 2011.
This increase was primarily attributed to a $1.0 million milestone payment
received under the Company's HCV collaboration agreement with Merck, partially
offset by lower royalties under a license related to the Company's
cryosurgical patents.The HCV collaboration with Merck has since been
terminated.Licensing and product development revenues for the fourth quarter
of 2012 and 2011 were $198,000 and $191,000, respectively, reflecting
royalties related to the Company's cryosurgical patents.

Consolidated gross margin for each of the years ended December 31, 2012 and
2011 was 63%.Consolidated gross margin for the three months ended December
31, 2012 was 60% compared to 62% for the three months ended December 31, 2011.
The current quarter gross margin was negatively impacted by a change in
product mix and a decline in the absorption of labor and overhead costs.

For the year ended December 31, 2012, consolidated operating expenses were
$71.8 million, an increase over the $61.1 million reported for the year ended
December 31, 2011.This increase resulted from the inclusion of a full-year of
DNAG operating expenses and $9.9 million of costs related to the OraQuick®
In-Home HIV Test commercialization. These increases were partially offset by
lower clinical trial costs related to the Company's OraQuick® In-Home HIV
test.

Consolidated operating expenses increased to $19.4 million for the fourth
quarter of 2012, from $14.9 million in the comparable period of 2011. This
increase was the result of higher costs related to the commercialization of
the Company's OraQuick® In-Home HIV test.The current quarter expenses
included $5.2 million of promotional and advertising costs related to this
product.

For the year and three months ended December 31, 2012, the Company recorded an
income tax benefit of $1.4 million and $259,000, 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 full year of 2012 was negatively impacted by a second quarter adjustment
to the Company's Canadian deferred tax liability to reflect a change in the
enacted Canadian provincial income tax rates.

Cash totaled $87.9 million at December 31, 2012 compared to $23.9 million at
December 31, 2011.Working capital was $103.5 million at December 31, 2012
compared to $30.9 million at December 31, 2011.In July 2012, the Company
completed a secondary offering of 6.1 million shares of its common stock,
resulting in net proceeds of $70.2 million after expenses of the offering.

First Quarter 2013 Outlook

The Company expects total consolidated net revenues to range from $20.0 to
$21.0 million and is projecting a consolidated net loss of approximately $0.18
- $0.19 per share for the first quarter of 2013.

Revenues projected for the first quarter of 2013 are expected to be
sequentially down from the fourth quarter of 2012 primarily as a result of
lower infectious disease testing sales to the professional market.During the
past several years, the first quarter of each year has historically been the
lowest revenue quarter of the year for this part of the Company's base
business, while the fourth quarter has been the highest.

The projected net loss for the first quarter includes the impact of the
medical device tax imposed under the Affordable Care Act and higher patent
royalties payable on the Company's OraQuick® professional products under a
litigation settlement previously reached with Alere (formerly Inverness
Medical) in 2009.In addition, this projection includes approximately $7.3
million in advertising and promotional costs related to the Company's
OraQuick® In-Home HIV test.

Financial Data

Condensed Consolidated Financial Data
(In thousands, except per-share data)
                                                        
                          Unaudited
                                                        
                          Three months ended   Year ended
                          December 31,         December 31,
                          2012       2011      2012        2011
Results of Operations                                    
Net revenues               $22,144  $23,690 $87,820   $81,881
Cost of products sold      8,893     9,094    32,249     30,164
Gross profit               13,251    14,596   55,571     51,717
Operating expenses:                                      
Research and development   2,893     3,297    12,445     18,407
Sales and marketing        11,597    6,357    37,087     22,383
General and administrative 4,911     5,222    22,309     20,325
Total operating expenses   19,401    14,876   71,841     61,115
Operating loss             (6,150)   (280)    (16,270)   (9,398)
Other income (expense)     25        (158)    (242)      (312)
Loss before income taxes   (6,125)   (438)    (16,512)   (9,710)
Income tax benefit         (259)     (553)    (1,397)    (869)
Net income (loss)          $(5,866) $115    $(15,115) $(8,841)
Earnings (loss) per share:                               
Basic and Diluted          $(0.11)  $--    $(0.29)   $(0.19)
                                                        
Weighted average shares:                                 
Basic                      55,224     47,264    51,457      46,908
Diluted                    55,224     48,893    51,457      46,908


Summary of Revenues by Market and Product (Unaudited)
                                                                 
                               Three Months Ended December 31,
                               Dollars                     Percentage of Net
                                                             Revenues
Market                          2012      2011      % Change 2012     2011
                                                                 
Infectious disease testing      $11,846 $11,592 2%       54%      49%
Substance abuse testing         2,101    3,487    (40)     9        15
Cryosurgical systems            2,696    3,139    (14)     12       13
Molecular collection systems    4,266    4,194    2        19       17
Insurance risk assessment       1,037    1,087    (5)      5        5
Net product revenues            21,946   23,499   (7)      99       99
Licensing and product           198      191      4        1        1
development
Net revenues                    $22,144 $23,690 (7)%     100%     100%

                             Year Ended December 31,
                             Dollars                     Percentage of Total
                                                           Revenues
Market                        2012      2011      % Change 2012      2011
                                                                
Infectious disease testing    $42,728 $44,691 (4)%     49%       55%
Substance abuse testing       9,407    12,498   (25)     11        15
Cryosurgical systems          14,876   12,046   23       17        15
Molecular collection systems  14,258   6,216    129      16        8
Insurance risk assessment     4,484    5,232    (14)     5         6
Net product revenues          85,753   80,683   6        98        99
Licensing and product         2,067    1,198    73       2         1
development
Net revenues                  $87,820 $81,881 7%       100%      100%

                                                                
                     Three Months Ended           Year Ended
                     December 31,                December 31,
OraQuick^® Revenues   2012      2011      % Change 2012     2011      % Change
                                                                
Domestic HIV          $9,157  $9,775  (6)%     $34,265 $38,722 (12)%
International HIV     773      721      7        3,061   3,011    2
Domestic HIV OTC      546      --      N/A      546     --      N/A
Domestic HCV          847      426      99       2,805   890      215
International HCV     326      387      (16)     1,059   672      58
Net OraQuick®         $ 11,649 $ 11,309 3%       $41,736 $43,295 (4)%
revenues
                                                                
                     Three Months Ended           Year Ended
                     December 31,                December 31,
Intercept^® Revenues  2012      2011      % Change 2012     2011      % Change
                                                                
Domestic              $1,354  $2,096  (35)%    $6,335 $8,004  (21)%
International         90       439      (79)     706     1,912    (63)
Net Intercept®        $1,444  $2,535  (43)%    $7,041 $9,916  (29)%
revenues
                                                                
                     Three Months Ended           Year Ended
                     December 31,                December 31,
Cryosurgical Systems  2012      2011      % Change 2012     2011      % Change
Revenues
                                                                
Professional domestic $1,818  $1,678  8%       $7,159 $6,775  6%
Professional          352      412      (15)     1,462   1,400    4
international
Over-the-Counter      526      1,049    (50)     6,255   3,871    62
Net cryosurgical      $2,696  $3,139  (14)%    $14,876 $12,046 23%
systems revenues

                                                           
Condensed Consolidated Balance Sheets                       
(Unaudited)                               December 31, 2012 December 31, 2011
Assets                                                      
                                                           
Cash                                       $87,888         $23,878
Accounts receivable, net                   17,545           17,159
Inventories                                12,758           9,621
Other current assets                       2,212            2,178
Property and equipment, net                18,546           19,855
Intangible assets, net                     27,207           30,383
Goodwill                                   25,445           24,740
Other non-current assets                   124              47
Total assets                               $191,725        $127,861
                                                           
Liabilities and Stockholders' Equity                        
Current portion of long-term debt          $--            $7,292
Accounts payable                           3,380            4,142
Deferred revenue                           5,580            1,318
Accrued expenses                           7,960            9,224
Other non-current liabilities              89               --
Deferred income taxes                      4,401            5,636
Stockholders' equity                       170,315          100,249
Total liabilities and stockholders' equity $191,725        $127,861

                                                      Year ended
                                                      December 31,
Additional Financial Data(Unaudited)                  2012      2011
                                                               
Capital expenditures                                   $2,019  $2,505
Net proceeds from public offering                      $70,245 $--
Acquisition of DNA Genotek, Inc., net of cash acquired $--    $49,730
Depreciation and amortization                          $7,250  $4,891
Stock based compensation                               $5,197  $4,100
Cash used in operating activities                      $5,372  $2,994

Conference Call

The Company will host a conference call and audio webcast to discuss the
Company's 2012 fourth quarter and full year financial results, business
developments and financial guidance for the first quarter of 2013, 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, Ronald H. Spair,
Chief Financial Officer and Chief Operating Officer and Kathy Weber, Senior
Vice President and General Manager, Consumer Products. 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
#87367276 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 February 13,
2013, by dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and
entering the Conference ID #87367276.

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

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