OraSure Announces Record Full-Year and Quarterly Revenues

OraSure Announces Record Full-Year and Quarterly Revenues

BETHLEHEM, Pa., Feb. 5, 2014 (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 2013.

Financial Highlights

  *The Company reported record revenues for both the fourth quarter and
    full-year 2013. Consolidated net revenues for the fourth quarter were
    $28.8 million, a 30% increase from the comparable quarter of 2012.
    Consolidated net revenues for the full-year were $98.9 million, a 13%
    increase from the comparable period of 2012. During the fourth quarter and
    full-year period, net product revenues increased 31% and 15%,
    respectively, compared to the year ago periods. These increases were
    primarily due to sales of the Company's OraQuick® In-Home HIV test (which
    included a non-recurring revenue adjustment described below) and higher
    revenues from the Company's molecular collection systems subsidiary, DNA
    Genotek ("DNAG").
    
  *Gross sales of the Company's OraQuick® In-Home HIV test were $4.3 million
    and $9.9 million for the fourth quarter and full-year 2013,
    respectively.These gross sales included a non-recurring favorable $2.7
    million adjustment made in December 2013 to account for a change in the
    Company's revenue recognition policy related to this product.The gross
    sales for the fourth quarter and full-year of 2013 were reduced by
    customer allowances for cooperative advertising, cash discounts and other
    allowances, resulting in net revenues of $3.9 million and $9.1 million
    recorded in each respective period.Gross and net sales of the Company's
    OraQuick® In-Home test for the fourth quarter and full-year 2012 were
    $902,000 and $546,000, respectively.
    
  *Net revenues generated by DNAG during the fourth quarter of 2013 were $6.8
    million, a 60% increase from the comparable period in 2012. DNAG net
    revenues for the full-year 2013 were $20.4 million, a 43% increase from
    2012.The increases in both periods were primarily the result of higher
    sales to commercial customers.
    
  *Net revenues for the Company's OraQuick® rapid HCV test reached $1.9
    million for the fourth quarter and $5.1 million for the full-year 2013,
    representing increases of 65% and 32%, respectively, from the comparable
    2012 periods.This growth reflects increasing demand for the product in
    both the domestic and international markets.
    
  *Consolidated net income for the fourth quarter of 2013 was $6.2 million,
    or $0.11 per share, which compares to a net loss of $5.9 million, or $0.11
    per share, for the fourth quarter of 2012.Consolidated net loss for the
    full-year 2013 was $11.2 million, or $0.20 per share, which compares to a
    net loss of $15.1 million, or $0.29 per share, for 2012.The results for
    the fourth quarter and full-year 2013 included $4.6 million and $18.8
    million in advertising and promotional expenses, respectively, associated
    with the Company's OraQuick® In-Home HIV test.Also included in the
    results for both periods was an $8.3 million settlement payment received
    by the Company for the termination of the Company's oral fluid assay
    collaboration agreement with Roche Diagnostics.

"We are pleased with the Company's overall financial results and especially
the solid revenue growth delivered in 2013," said Douglas A. Michels,
President and CEO of OraSure Technologies."Our molecular collection systems
business was particularly strong, growing by more than 40% for the
year.Infectious disease revenues also increased largely due to contributions
from our newest products, the OraQuick® In-Home HIV test and the OraQuick®
rapid HCV test.The transition to a new collaboration for the supply of high
throughput homogeneous drug assays represents another highlight from the year
that should enable growth in our substance abuse testing business."

Financial Results

Consolidated net product revenues for the fourth quarter and full-year of 2013
increased 31% and 15%, respectively, from the comparable periods of 2012.The
fourth quarter increase was primarily a result of higher sales of the
Company's infectious disease testing products, which included the
non-recurring net favorable $2.5 million accounting adjustment, and higher
molecular collection systems and cryosurgical systems product sales, partially
offset by lower sales of the Company's insurance risk assessment products. The
increase in net product revenues for the full-year of 2013 was primarily the
result of higher sales of the Company's infectious disease testing products,
including the $2.5 million net accounting adjustment, and higher sales of
molecular collections systems products, partially offset by lower sales of the
Company's substance abuse testing, cryosurgical systems and insurance risk
assessment products.

The Company had no consolidated licensing and product development revenues for
the fourth quarter of 2013 as a result of the expiration of certain patents
licensed to a third party.This compares to $198,000 recorded for the fourth
quarter of 2012.Consolidated licensing and product development revenues for
the year ended December 31, 2013 decreased to $623,000 from $2.1 million in
the comparable period of the prior year, primarily due to the absence of a
$1.0 million milestone payment received in the first quarter of 2012 under the
Company's HCV collaboration agreement with Merck. No similar payment was
received during 2013 because the collaboration agreement with Merck was
terminated in November 2012.

Consolidated gross margin for the three months and year ended December 31,
2013 was 60% and 59%, respectively.Consolidated gross margin for the three
months and year ended December 31, 2012 was 60% and 63%, respectively.Gross
margin for the current year was negatively impacted by higher royalties, an
unfavorable change in product mix and the absence of the $1.0 million HCV
milestone payment, partially offset by an improvement in overhead
absorption.

Consolidated operating expenses decreased to $11.1 million during the fourth
quarter of 2013 compared to $19.4 million in the comparable period of 2012.
For the year ended December 31, 2013, consolidated operating expenses were
$70.8 million, a decrease from the $71.8 million reported for the year ended
December 31, 2012.The decrease for the fourth quarter of 2013 was primarily
due to the inclusion of the $8.3 million Roche settlement payment partially
offset by higher promotional and advertising expenses associated with the
Company's OraQuick® In-Home HIV test.The current quarter and full-year period
expenses included $4.6 million and $18.8 million of promotional and
advertising costs related to this product, compared to $5.2 million and $9.9
million spent in the fourth quarter and full-year of 2012, respectively.

For the three months ended December 31, 2013, the Company recorded Canadian
income tax expense of $14,000.For the year ended December 31, 2013, the
Company recorded a Canadian income tax benefit of $772,000 associated with the
loss before income taxes and certain Canadian research and development and
investment tax credits at DNAG.

The Company's cash balance totaled $93.2 million at December 31, 2013 compared
to $87.9 million at December 31, 2012.Working capital was $100.6 million at
December 31, 2013 compared to $103.5 million at December 31, 2012.For the
year ended December 31, 2013, the Company generated $8.3 million from
operations, which included the $8.3 million settlement payment from
Roche.Cash generated by operations in the fourth quarter of 2013 was $11.4
million which also included the $8.3 million Roche payment.

First Quarter 2014 Outlook

The Company expects consolidated net revenues to range from $23.0 to $23.5
million and is projecting a consolidated net loss of approximately $0.13 -
$0.14 per share for the first quarter of 2014.

Financial Data

Condensed Consolidated Financial Data
(In thousands, except per-share data)
                                                             
Unaudited
                                                 
                       Three months ended         Year ended
                       December 31,               December 31,
                       2013         2012          2013          2012
Results of Operations                                         
Net revenues ^(1)       $28,768    $22,144     $98,940     $87,820
Cost of products sold   11,640      8,893        40,351       32,249
Gross profit            17,128      13,251       58,589       55,571
Operating expenses:                                           
Research and            2,212       2,893        10,932       12,445
development
Sales and marketing     11,241      11,597       46,465       37,087
General and             5,912       4,911        21,654       22,309
administrative
Gain on contract        (8,300)     --           (8,300)      --
termination settlement
Total operating         11,065      19,401       70,751       71,841
expenses
Operating income (loss) 6,063       (6,150)      (12,162)     (16,270)
Other income (expense)  164         25           200          (242)
Income (loss) before    6,227       (6,125)      (11,962)     (16,512)
income taxes
Income tax expense      14          (259)        (772)        (1,397)
(benefit)
Net income (loss)       $6,213     $(5,866)    $(11,190)   $(15,115)
Earnings (loss) per                                           
share:
Basic and Diluted       $0.11      $(0.11)     $(0.20)     $(0.29)
                                                             
Weighted average                                              
shares:
Basic                   55,616       55,224        55,555        51,457
Diluted                 56,176       55,224        55,555        51,457
                                                             
(1) The three months and year ended December 31, 2013 net revenues include a
non-recurring net favorable $2.5 million adjustment to account for a change in
the Company's revenue recognition policy related to its OraQuick® In-Home HIV
tests.

Summary of Revenues by Market and Product (Unaudited)

                                 Three Months Ended December 31,
                                                             Percentage of
                                 Dollars                   Total Net
                                                             Revenues
Market                            2013      2012      %      2013   2012
                                                      Change
                                                               
Infectious disease testing        $15,436 $11,846 30%    54%    54%
Substance abuse testing           2,116    2,101    1      7      9
Cryosurgical systems              3,558    2,696    32     12     12
Molecular collection systems      6,831    4,266    60     24     19
Insurance risk assessment         827      1,037    (20)   3      5
Net product revenues              28,768   21,946   31     100    99
Licensing and product development --       198      (100)  --    1
Net revenues                      $28,768 $22,144 30%    100%   100%

                                 
                                 Year Ended December 31,
                                                             Percentage of
                                 Dollars                   Total Net
                                                             Revenues
Market                            2013      2012      %      2013   2012
                                                      Change
                                                               
Infectious disease testing        $50,961 $42,728 19%    51%    49%
Substance abuse testing           8,571    9,407    (9)    9      11
Cryosurgical systems              14,468   14,876   (3)    14     17
Molecular collection systems      20,381   14,258   43     21     16
Insurance risk assessment         3,936    4,484    (12)   4      5
Net product revenues              98,317   85,753   15     99     98
Licensing and product development 623      2,067    (70)   1      2
Net revenues                      $98,940 $87,820 13%    100%   100%

                                                
                      Three Months Ended         Year Ended
                      December 31,               December 31,
OraQuick^® Revenues    2013      2012      %      2013     2012      %
                                           Change                    Change
                                                               
Domestic HIV           $8,447  $9,157  (8)%   $32,301 $34,265 (6)%
International HIV      907      773      17     3,365   3,061    10
Domestic HIV OTC       3,909    546      616    9,106   546      1,568
Net HIV revenues       13,263   10,476   27     44,772  37,872   18
                                                               
Domestic HCV           1,073    847      27     2,847   2,805    1
International HCV      860      326      164    2,268   1,059    114
Net HCV revenues       1,933    1,173    65     5,115   3,864    32
                                                               
Net OraQuick® revenues $ 15,196 $ 11,649 30%    $49,887 $41,736 20%

                                               
                       Three Months Ended       Year Ended
                       December 31,             December 31,
Intercept^® Revenues    2013     2012     %      2013     2012     %
                                          Change                   Change
                                                             
Domestic                $1,453 $1,354 7%     $5,693 $6,335 (10)%
International           115     90      28     500     706     (29)
Net Intercept® revenues $1,568 $1,444 9%     $6,193 $7,041 (12)%

                                                  
                          Three Months Ended       Year Ended
                          December 31,             December 31,
Cryosurgical Systems       2013     2012     %      2013      2012      %
Revenues                                     Change                     Change
                                                                  
Domestic professional      $1,828 $1,818 1%     $6,020  $7,159  (16)%
International professional 402     352     14     1,441    1,462    (1)
International              1,328   526     152    7,007    6,255    12
over-the-counter
Net cryosurgical systems   $3,558 $2,696 32%    $14,468 $14,876 (3)%
revenues


Condensed Consolidated Balance Sheets(Unaudited)
                                                           
                                          December 31, 2013 December 31, 2012
Assets                                                      
                                          $93,191         $87,888
Cash
Accounts receivable, net                   12,957           17,469
Inventories                                11,444           12,758
Other current assets                       1,983            2,002
Property and equipment, net                17,933           18,546
Intangible assets, net                     22,226           27,207
Goodwill                                   23,782           25,445
Other non-current assets                   729              124
Total assets                               $184,245        $191,439
                                                           
Liabilities and Stockholders' Equity                        
Accounts payable                           $4,834          $3,380
Deferred revenue                           1,119            5,504
Accrued expenses                           13,032           7,750
Other non-current liabilities              677              89
Deferred income taxes                      3,437            4,401
Stockholders' equity                       161,146          170,315
Total liabilities and stockholders' equity $184,245        $191,439

                                               
                                               Year ended
                                               December 31,
Additional Financial Data(Unaudited)           2013     2012
                                                       
Capital expenditures                            $2,462 $2,019
Net proceeds from public offering               $--    $70,246
Depreciation and amortization                   $6,492 $7,250
Stock based compensation                        $5,572 $5,197
Cash provided by (used in) operating activities $8,286 $(5,373)

Conference Call

The Company will host a conference call and audio webcast to discuss the
Company's 2013 fourth quarter and full-year financial results, certain
business developments and financial guidance for the first quarter of 2014,
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 Kathleen
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
#37105448 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 12, 2014, by dialing 855-859-2056
(Domestic) or 404-537-3406 (International) and entering the Conference ID
#37105448.

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, 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 our 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; ability to effectively resolve 483 observations,
warning letters and other findings or comments from the FDA or other
regulators; 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,
historic purchase levels or minimum purchase requirements for the Company's
products; impact of replacing distributors; inventory levels at distributors
and other customers; ability of DNA Genotek to achieve its financial and
strategic objectives and continue to increase its revenues; ability to
identify, complete, integrate and realize the full benefits of future
acquisitions; impact of competitors, competing products and technology
changes; impact of negative economic conditions, 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 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
products and components; availability of related products produced by third
parties or products required for use of the Company's 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 the
Company's 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, 2012, 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

company logo
 
Press spacebar to pause and continue. Press esc to stop.