Chembio Diagnostics Reports First Quarter 2013 Financial Results

Chembio Diagnostics Reports First Quarter 2013 Financial Results

Conference Call Begins at 10:00 a.m. Eastern Time Today

MEDFORD, N.Y., May 9, 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 three months ended March
31, 2013.

Financial highlights for the 2013 first quarter include the following (all
comparisons are with the 2012 first quarter):

  oTotal revenues of $6.68 million, up 0.4% compared with $6.65 million
  oProduct sales of $6.31 million, down 0.8% compared with $6.36 million
  oOperating income of $487,000, compared with operating income of $720,000
  oNet income of $317,000 or $0.04 per diluted share, compared with net
    income of $433,000 or $0.05 per diluted share

Commenting on the Company's financial performance, Lawrence Siebert, Chembio's
Chief Executive Officer, said, "Strong growth in sales of lateral flow HIV
tests to South America outside Brazil and to our U.S. marketing partner Alere
were offset by declines in sales of Dual Path Platform^® ("DPP") products to
FIOCRUZ in Brazil. Moving forward we will continue efforts to realize
additional sales to replace reduced revenue from FIOCRUZ that we currently
anticipate.

"We are optimistic for continued growth of our lateral flow HIV tests in 2013
by Alere, as the U.S. Preventive Services Task Force reported its final
recommendations on April 30, 2013 calling for the routine HIV testing of all
people between the ages of 15 and 65. These guidelines fully embrace the
routine testing that the Centers for Disease Control and Prevention has been
recommending since 2006. The new recommendations should catalyze demand for
HIV testing, especially as the Affordable Care Act is implemented and there
will be no co-pay required for this preventive service, given the 'A' rating
that has been indicated.

"Our DPP^® HIV 1/2 Assay ("DPP^® HIV"), for use with oral fluid or blood
samples, received U.S. Food and Drug Administration ("FDA") approval in
December 2012. We are now focused on completing the requirements for a
Clinical Laboratory Improvement Act ("CLIA") waiver for this product in order
to enable sales to the point-of-care market segments where these tests are
primarily used. We expect to submit the CLIA waiver application to the FDA
this July. Our commercial strategy to address the public health market for
DPP^® HIV will feature a small direct sales organization, complemented by
distributors to reach the hospital and physician office market. We are
increasingly optimistic that, in the future, this sales organization will be
able to market our DPP^® Syphilis Screen & Confirm and DPP^® HIV-Syphilis
multiplex tests by mid-2014, and our Hepatitis-C test in 2015, based upon
positive regulatory determinations.

"We are actively developing new revenue opportunities in a number of
international markets, including, but not limited to Brazil, with current and
new international distribution partners for our DPP^® HIV-Syphilis test, as
well as for our FDA approved lateral flow HIV tests.We are optimistic that
these new revenue opportunities will offset lower sales to FIOCRUZ in 2013 and
look forward to reporting on these initiatives as they develop," concluded Mr.
Siebert.

First Quarter Results

Total revenues for the first quarter of 2013 of $6.68 million were up less
than 1% compared with total revenues of $6.65 million in the prior-year
period.Product sales in the 2013 first quarter of $6.31 million were down
less than 1% compared with product sales of $6.63 in the prior-year period,
primarily due to strong sales of lateral flow technology products in South
America and the U.S., offset by declines in DPP^® product sales in Brazil to
FIOCRUZ.Research and development ("R&D"), milestone, grant and royalty
revenues for the three months ended March 31, 2013 increased to $365,000 from
$290,000 in the prior-year period.

Gross profit for the 2013 first quarter decreased 19% to $2.69 million
compared with $3.33 million for the prior-year period, due primarily to a
product mix resulting in a higher cost of products sold.Product gross profit
for the first quarter of 2013 decreased 23% to $2.33 million, from $3.04
million in the prior-year period, and product gross margin also declined
primarily due to product mix.

R&D expenses in the first quarter of 2013 were $1.05 million, compared with
$1.38 million in the prior-year period.The 2013 first quarter included
$98,000 of clinical trial expenses, compared with $484,000 in the prior-year
period.

Selling, general and administrative expenses in the first quarter of 2013
decreased to $1.16 million from $1.23 million in the prior-year period,
largely due to lower commissions paid on DPP^® product sales to Brazil, and to
changes in the allowance for doubtful accounts.

Operating income for the first quarter of 2013 was $487,000, compared with
operating income of $720,000 for the prior-year period. 

Net income for the first quarter of 2013 was $317,000 or $0.04 per diluted
share, compared with net income of $433,000 or $0.05 per diluted share, for
the prior-year period.

Balance Sheet Highlights

The Company had cash and cash equivalents of $2.60 million as of March 31,
2013, compared with $2.95 million as of December 31, 2012.Accounts receivable
increased by $423,000, not including the change in the allowance for doubtful
accounts, during the quarter to $5.28 million, and accounts payable and
accrued liabilities decreased by $114,000.Overall, working capital increased
by $390,000 during the first quarter to $8.02 million.

In April 2013 the Company completed an underwritten public offering of 1.2
million shares of its common stock at $5 per share, realizing net proceeds of
approximately $5.5 million.

Conference Call

Chembio has scheduled a conference call and webcast for 10:00 a.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 August 9,
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 #413457. The
conference call may also be accessed via the internet at www.chembio.com or
http://www.investorcalendar.com/IC/CEPage.asp?ID=170929.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.

                             (Tables to follow)

Chembio Diagnostics, Inc. & Subsidiary
Summary of Condensed Consoldidated Results of Operations
                                                              
                                                UNAUDITED
                                                For the three months ended
                                                March 31, 2013 March 31, 2012
Net product sales                              $6,313,190   $6,363,152
                                                              
R&D, milestone and grant revenue               364,963       290,100
                                                              
TOTAL REVENUES                                 $6,678,153   $6,653,252
                                                              
GROSS MARGIN                                   $2,693,890   $3,332,864
                                                              
Research and development expenses              $1,045,259   $1,379,131
                                                              
Selling, general and administrative expenses   $1,162,080   $1,233,968
                                                              
INCOME FROM OPERATIONS                         $486,551     $719,765
                                                              
OTHER INCOME (EXPENSE):                        $1,002       $(922)
                                                              
Income tax provision                           $170,430     $285,400
                                                              
NET INCOME                                     $317,123     $433,443
                                                              
Basic earnings per share                       $0.04        $0.05
                                                              
Diluted earnings per share                     $0.04        $0.05
                                                              
Weighted average number of shares outstanding,  8,062,984     7,934,331
basic
                                                              
Weighted average number of shares outstanding,  8,699,209     8,512,374
diluted



Chembio Diagnostics, Inc. & Subsidiary
Summary of Condensed Consolidated Balance Sheets
                                                           
                                             March 31, 2013 December 31, 2012
                                             (UNAUDITED)    
CURRENT ASSETS:                                             
Cash and cash equivalents                     $2,598,745   $2,951,859
Accounts receivable, net                      5,278,702     4,821,357
Inventories                                   2,601,489     2,488,071
Prepaid expenses and other current assets     754,648       747,463
TOTAL CURRENT ASSETS                          11,233,584    11,008,750
                                                           
FIXED ASSETS, net of accumulated              1,656,299     1,427,646
depreciation
                                                           
OTHER ASSETS:                                               
                                                           
Deferred tax asset, net of valuation          4,079,807     4,233,194
allowance
License agreements, net of current portion    375,000       400,000
Deposits on manufacturing equipment           86,679        223,584
Deposits and other assets                     41,976        41,976
                                                           
                                             $17,473,345  $17,335,150
                                                           
CURRENT LIABILITIES:                                        
Accounts payable and accrued liabilities     3,189,661     3,303,923
Current portion of loans payable              --           51,236
Customer deposits                            23,224        23,224
TOTAL CURRENT LIABILITIES                     3,212,885     3,378,383
                                                           
OTHER LIABILITIES:                                          
Loans payable - net of current portion        --           82,247
TOTAL LIABILITIES                             3,212,885     3,460,630
                                                           
COMMITMENTS AND CONTINGENCIES                               
                                                           
STOCKHOLDERS' EQUITY:                                       
Preferred stock                               --           --
Common stock -- $.01 par value                80,861        80,362
Additional paid-in capital                    41,184,467    41,116,149
Accumulated deficit                           (27,004,868)  (27,321,991)
TOTAL STOCKHOLDERS' EQUITY                    14,260,460    13,874,520
                                                           
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    17,473,345    17,335,150



Chembio Diagnostics, Inc. & Subsidiary
Summary of Condensed Consolidated Cash Flow
(UNAUDITED)

                                                For the three months ended
                                                March 31, 2013 March 31, 2012
                                                              
Net cash provided by operating activities        $57,438      $149,226
Net cash used in investing activities            (207,507)     (223,716)
Net cash provided by (used in) financing         (203,045)     17,812
activities
(DECREASE) IN CASH AND CASH EQUIVALENTS          $(353,114)   $(56,678)

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
 
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