Chembio Diagnostics Reports Fourth Quarter and Full-Year 2012 Financial Results

Chembio Diagnostics Reports Fourth Quarter and Full-Year 2012 Financial
Results

     Fourth Quarter Product Sales Up 25%, Full-Year Product Sales Up 40%
            Conference Call Begins at 5:00 p.m. Eastern Time Today

MEDFORD, N.Y., March 7, 2013 (GLOBE NEWSWIRE) -- Chembio Diagnostics, Inc.
(Nasdaq:CEMI), a leader in point-of-care diagnostic tests for infectious
diseases, today reported financial results for the fourth quarter and year
ended December 31, 2012.

Financial highlights for the 2012 fourth quarter include the following (all
comparisons are with the 2011 fourth quarter):

  oTotal revenues of $7.87 million, up 27% compared with $6.22 million
  oProduct sales of $7.41 million, up 25% compared with $5.91 million
  oOperating income of $705,000, compared with operating income of $551,000
  oNet income of $492,000 or $0.06 per diluted share, compared with net
    income of $5.68 million or $0.66 per diluted share, which included a tax
    benefit of $5.13 million or $0.60 per diluted share

Financial highlights for 2012 full year include the following (all comparisons
are with the 2011 full year):

  oTotal revenues of $25.61 million, up 32% compared with $19.39 million
  oProduct sales of $24.33 million, up 40% compared with $17.42 million
  oOperating income of $1.45 million, compared with operating income of $1.09
    million
  oNet income of $941,000 or $0.11 per diluted share, compared with net
    income of $6.21 million or $0.73 per diluted share, which included a tax
    benefit of $5.13 million or $0.60 per diluted share

Commenting on the Company's financial performance, Lawrence Siebert, Chembio's
Chief Executive Officer, said, "During 2012 Chembio achieved strong growth and
profitability and made considerable progress in our strategic plan. Chembio's
US products are well positioned, growing both in sales and market share. We
reached milestones on key product development programs and listed our common
shares on the NASDAQ capital markets. We start the year with a backlog of
orders and a strong outlook for 2013.

"Late in the fourth quarter we received U.S. Food and Drug Administration
(FDA) approval for our DPP^® HIV 1/2 Assay, a rapid point-of-care test for the
detection of antibodies to HIV 1 and 2 in oral fluid, finger-stick whole
blood, venous whole blood, serum or plasma.We believe our DPP^® HIV 1/2 Assay
has superior performance compared with the only other oral fluid HIV rapid
test on the market.The market for these tests is expected to grow
significantly with the recent recommendations by the U.S. Preventive Services
Task Force to mandate insurance reimbursement for routine HIV testing.

"We are in the process of preparing a request for a Clinical Laboratory
Improvement Amendment (CLIA) waiver and we plan to make this submission during
the first half of 2013.In the meantime, we continue to develop our
go-to-market strategy for DPP^® HIV 1/2 and expect a commercial launch in the
second half of the year," concluded Mr. Siebert.

Fourth Quarter Results

Total revenues for the fourth quarter of 2012 were $7.87 million, an increase
of 27% compared with total revenues of $6.22 million in the prior-year
period.Product sales increased 25% to $7.41 million from $5.91 million in the
prior-year period. Research and development (R&D), milestone, grant and
royalty revenues increased to $458,000 from $295,000 in the prior-year period.

Gross margin for the 2012 fourth quarter increased 15% to $3.16 million
compared with $2.74 million for the prior-year period, due primarily to higher
product sales, and R&D, licensing and royalty revenues.Product gross profit
for the fourth quarter of 2012 increased 11% to $2.70 million, from $2.43
million in the prior-year period, and product gross margin declined primarily
due to scrap and product mix.

R&D expenses in the fourth quarter of 2012 were $1.12 million compared with
$1.18 million in the prior-year period.The 2012 fourth quarter included
$157,000 of clinical trial expenses compared with $190,000 in the prior-year
period.

Selling, general and administrative expenses in the fourth quarter of 2012
increased to $1.33 million compared with $1.01 million in the prior-year
period, largely due to higher commissions on DPP^® product sales to Brazil,
and higher wages and other expenses.

Operating income for the fourth quarter of 2012 was $705,000, compared with
operating income of $551,000 for the prior-year period. 

Net income for the fourth quarter of 2012 was $492,000 or $0.06 per diluted
share, compared with net income of $5.68 million or $0.66 per diluted share
for the prior-year period.The 2012 fourth quarter includes a charge for
income tax provision of $214,000 or $0.02 per diluted share, which
approximates the amount of income taxes that would be attributable to the
Company if it did not have a net operating loss carryforward to offset income
taxes payable.The 2011 fourth quarter net income included an income tax
benefit of $5.13 million in income tax provision or $0.60 per diluted share,
as the Company recognized a deferred tax asset relevant to its net operating
loss carryforwards.

2012 Full-Year Results

Total revenues for 2012 were $25.61 million, an increase of 32% compared with
total revenues of $19.39 million for 2011.2012 product sales increased 40% to
$24.33 million compared with $17.42 million in 2011. R&D, milestone, grant
and royalty revenues for 2012 decreased to $1.28 million from $1.83 million in
2011.

Gross margin for 2012 increased 15% to $10.79 million compared with $9.39
million for 2011, due to higher product sales partially offset by lower R&D,
licensing and royalty revenues.Product gross margin for 2012 increased 28% to
$9.51 million, compared with $7.42 million for 2011, while product gross
margin declined due to higher scrap and product mix.

R&D expenses in 2012 were $4.49 million compared with$4.88 million in
2011.

Selling, general and administrative expenses increased to $4.85 million in
2012 from $3.42 million in 2011, largely due to higher commissions on DPP^®
product sales to Brazil, the initial listing fee paid to list on NASDAQ, and
higher wages, professional fees and stock-based compensation.

Operating income for 2012 was $1.45 million, compared with operating income of
$1.09 million for 2011. 

Net income for 2012 was $941,000 or $0.11 per diluted share, compared with net
income of $6.21 million or $0.73 per diluted share for 2011.Net income for
2012 included a charge for income tax provision of $509,000 or $0.06 per
diluted share, which approximates the amount of income taxes that would be
attributable to the Company if it did not have a net operating loss
carryforward to offset the recorded amount of income taxes otherwise
payable.Net income for 2011 included a benefit of $5.13 million in income tax
provision or $0.60 per diluted share, as the Company booked a deferred tax
asset for its net operating loss carryforwards.

Balance Sheet Highlights

The Company had cash and cash equivalents of $2.95 million as of December 31,
2012, compared with $3.01 million as of December 31, 2011.Accounts receivable
increased by $1.82 million to $4.82 million which was primarily responsible
for an increase in current assets of $2.02 million.Accounts payable and
accrued liabilities increased by $514,000.Overall, our working capital
increased by $1.50 million to $7.63 million.

Conference Call

Chembio has scheduled a conference call and webcast for 5:00 p.m. Eastern time
today.To participate in the call, please dial (877) 407-0778 from the U.S. or
(201) 689-8565 from outside the U.S. In addition, following the completion of
the call, a telephone replay will be accessible until May 6, 2013 at 11:59
p.m. Eastern time by dialing (877) 660-6853 from the U.S. or (201) 612-7415
from outside the U.S. and entering conference ID #409687.The conference call
may also be accessed via the internet at www.chembio.com or
http://www.investorcalendar.com/IC/CEPage.asp?ID=170616.An archive of the
webcast will be available for 90 days at www.chembio.com.

About Chembio Diagnostics

Chembio Diagnostics, Inc. develops, manufactures, licenses and markets
proprietary rapid diagnostic tests in the growing $10 billion point-of-care
testing market. Chembio's two FDA PMA-approved, CLIA-waived, rapid HIV tests
are marketed in the U.S. by Alere, Inc. (formerly, Inverness Medical
Innovations, Inc.). Chembio markets its HIV STAT-PAK® line of rapid HIV tests
internationally to government and donor-funded programs directly and through
distributors. Chembio has developed a patented point-of-care test platform
technology, the Dual Path Platform (DPP®) technology, which has significant
advantages over lateral-flow technologies. This technology is providing
Chembio with a significant pipeline of business opportunities for the
development and manufacture of new products based on DPP®. Headquartered in
Medford, NY, with approximately 170 employees, Chembio is licensed by the U.S.
Food and Drug Administration (FDA) as well as the U.S. Department of
Agriculture (USDA), and is certified for the global market under the
International Standards Organization (ISO) directive 13.485. For more
information, please visit: www.chembio.com.

Forward-Looking Statements

Statements contained herein that are not historical facts may be
forward-looking statements within the meaning of the Securities Act of 1933,
as amended.Forward-looking statements include statements regarding the
intent, belief or current expectations of the Company and its management.Such
statements are estimates only, reflect management's current views, are based
on certain assumptions, and involve risks and uncertainties.Actual revenues
and other results, events, or performance may differ materially from the above
forward-looking statements due to a number of important factors, and will be
dependent upon a variety of factors, including, but not limited to Chembio's
ability to obtain additional financing, to obtain regulatory approvals in a
timely manner and the demand for Chembio's products.Chembio undertakes no
obligation to publicly update these forward-looking statements to reflect
events or circumstances that occur after the date hereof or to reflect any
change in Chembio's expectations with regard to these forward-looking
statements or the occurrence of unanticipated events.Factors that may impact
Chembio's success are more fully disclosed in Chembio's most recent public
filings with the U.S. Securities and Exchange Commission.

Chembio Diagnostics, Inc. & Subsidiary
Summary of Condensed Consolidated Results of Operations
                                                            
                     UNAUDITED                                
                     For the three months ended For the years ended
                     December 31, December 31,   December 31,  December 31,
                      2012         2011           2012          2011
Net product sales   $7,407,919 $5,905,986   $24,327,355 $17,422,311
                                                            
License and royalty  -          15,000        -           140,322
revenue
                                                            
R&D, milestone and   458,147     295,431       1,283,240    1,825,403
grant revenue
                                                            
TOTAL REVENUES      $7,866,066 $6,216,417   $25,610,595 $19,388,036
                                                            
GROSS MARGIN        $3,157,589 $2,742,950   $10,789,991 $9,390,303
                                                            
Research and         $1,122,483 $1,180,810   $4,486,302  $4,878,119
development expenses
                                                            
Selling, general and
administrative        $1,330,035 $1,011,430   $4,851,587  $3,424,297
expenses
                                                            
INCOME FROM          $705,071   $550,710     $1,452,102  $1,087,887
OPERATIONS
                                                            
OTHER INCOME         $603       $(3,295)     $(1,584)    $(12,325)
(EXPENSE):
                                                            
Income tax provision $214,017   $(5,133,229) $509,237    $(5,133,229)
(benefit)
                                                            
NET INCOME          $491,657   $5,680,646   $941,281    $6,208,791
                                                            
Basic earnings per   $0.06      $0.72        $0.12       $0.79
share
                                                            
Diluted earnings per $0.06      $0.66        $0.11       $0.73
share
                                                            
Weighted average
number of shares      8,020,525   7,916,053     7,986,030    7,874,807
outstanding, basic
                                                            
Weighted average
number of shares      8,638,205   8,597,530     8,614,944    8,556,284
outstanding, diluted


Chembio Diagnostics, Inc. & Subsidiary
Summary of Condensed Consolidated Balance Sheets
                                                           
                                          December 31, 2012 December 31, 2011
                                                           
CURRENT ASSETS:                                             
Cash and cash equivalents                  $2,951,859      $3,010,954
Accounts receivable, net of allowance for
doubtful accounts of $58,000 and $30,000   4,821,357        2,998,449
at December 31, 2012 and 2011,
respectively
Inventories                                2,488,071        2,300,286
Prepaid expenses and other current assets  747,463          681,893
TOTAL CURRENT ASSETS                       11,008,750       8,991,582
                                                           
FIXED ASSETS, net of accumulated           1,427,646        1,062,276
depreciation
                                                           
OTHER ASSETS                                                
Deferred tax asset, net of valuation       4,233,194        4,749,622
allowance
License agreements and other assets        665,560          682,264
                                                           
                                          $17,335,150     $15,485,744
                                                           
TOTAL CURRENT LIABILITIES                  $3,378,383      $2,857,626
                                                           
TOTAL OTHER LIABILITIES                    82,247           133,484
                                                           
TOTAL LIABILITIES                          3,460,630        2,991,110
                                                           
TOTAL STOCKHOLDERS' EQUITY                 13,874,520       12,494,634
                                                           
                                          $17,335,150     $15,485,744


Chembio Diagnostics, Inc. & Subsidiary
Summary of Condensed Consolidated Cash Flow
                                                           
                                          For the years ended
                                          December 31, 2012 December 31, 2011
                                                           
Net cash provided by operating activities  $761,084        $2,268,408
Net cash used in investing activities      (872,442)        (726,680)
Net cash provided by (used in) financing   52,263           (667,125)
activities
(DECREASE) INCREASE IN CASH AND CASH       $(59,095)       $874,603
EQUIVALENTS

CONTACT: Chembio Diagnostics
         Susan Norcott
         (631) 924-1135, ext. 125
         snorcott@chembio.com
        
         LHA
         Anne Marie Fields
         (212) 838-3777
         AFields@lhai.com
         @LHA_IR_PR