OraSure Announces 2019 Full Year and Fourth Quarter Financial Results
BETHLEHEM, Pa., Feb. 19, 2020 (GLOBE NEWSWIRE) -- OraSure Technologies, Inc. (NASDAQ: OSUR), a leader in point-of-care diagnostic tests, specimen collection devices and microbiome laboratory and analytical services, today announced its financial results for the three months and year ended December 31, 2019.
Financial and Business Highlights
- Net revenues for the fourth quarter of 2019 were $49.7 million, a 1% decrease from the fourth quarter of 2018. Net product revenues were $47.2 million, a 5% increase from the fourth quarter of 2018. Net product and service revenues in the fourth quarter of 2019 increased 12% over the comparable period of 2018 if revenues from the Company’s cryosurgical systems business, which was sold in 2019, are excluded from the year ago period.
- Other revenue highlights include:
- International sales of the Company’s OraQuick® HIV products increased 123% compared to the fourth quarter of 2018. This increase was primarily the result of higher sales of the Company’s OraQuick® HIV Self-Test.
- Total microbiome product and service revenues in the fourth quarter of 2019 were $4.4 million compared to $1.9 million in the fourth quarter of 2018. Microbiome revenues in 2019 include the service revenues generated by the Company’s subsidiaries, CoreBiome, Inc. and Diversigen, Inc.
- Total molecular collection systems revenues including royalty income and other revenues were $27.8 million during the fourth quarter of 2019, a decline of 8% from the fourth quarter of 2018. Molecular collection systems product and service revenues were $25.5 million during the fourth quarter of 2019, and were flat compared to the fourth quarter of 2018.
- International sales of the Company’s OraQuick® HIV products increased 123% compared to the fourth quarter of 2018. This increase was primarily the result of higher sales of the Company’s OraQuick® HIV Self-Test.
- Net income for the fourth quarter of 2019 was $2.4 million, or $0.04 per share on a fully-diluted basis, compared to net income of $10.3 million, or $0.16 per share on a fully-diluted basis, for the fourth quarter of 2018. Net income for the fourth quarter of 2019 included $797,000 of acquisition-related transaction costs and a non-cash charge of $179,000 representing the change in fair value of contingent consideration associated with two acquisitions that closed at the beginning of the year. The net impact of the additional transaction costs and the change in the fair value of contingent consideration in the current quarter was approximately $0.02 per share on a fully-diluted basis. Net income for the fourth quarter of 2018 included $1.2 million of expense for activities in support of the early January 2019 acquisitions and $974,000 of transition costs associated with the Company’s executive management changes during that period. The transaction and transition costs together represent $0.04 per share for the fourth quarter of 2018. The transition costs in the fourth quarter consisted of non-cash stock compensation charges.
- Cash and investments totaled $189.8 million at December 31, 2019.
“We had a strong close to 2019. Our fourth quarter revenue performance was primarily driven by triple-digit growth in our international HIV sales and an impressive showing by our microbiome product and services business,” said OraSure President and CEO, Stephen S. Tang. “Through our acquisitions and investment in our core businesses, we have built on our leadership in sample collection and infectious disease diagnostics and bolstered our services capabilities in the burgeoning field of microbiome analysis. In 2020, we expect to increase our investment in these core areas to provide our customers with the information and data they need to understand health, wellness and disease states. Looking further ahead, we believe these activities will empower us to advance our innovation strategy at an ever faster rate.”
Financial Results
Net product and service revenues for the fourth quarter of 2019 increased 5% from the comparable period of 2018, primarily as a result of higher international HIV product sales and higher sales of the Company’s microbiome products and services. The increased sales were partially offset by the absence of cryosurgical sales in the quarter, as the cryosurgical systems business was divested in mid-August, and by lower genomics product sales.
International sales of the OraQuick® HIV Self-Test for the three months ended December 31, 2019 and 2018 included $966,000 and $855,000, respectively, of support payments under the Company’s charitable support agreement with the Bill & Melinda Gates Foundation.
Royalty income from a litigation settlement associated with a molecular collection device was $2.2 million and $4.8 million for the fourth quarter of 2019 and 2018, respectively. Other revenues were $334,000 and $578,000 for the fourth quarter of 2019 and 2018, respectively.
Gross profit percentage was 60% and 69% for the three months ended December 31, 2019 and 2018, respectively. Gross profit percentage in 2019 was negatively affected by a less favorable product mix as a result of higher sales of lower gross profit products and services and the decline in other revenues.
For the three months ended December 31, 2019, operating expenses were $25.8 million, an increase of $3.6 million from the $22.2 million reported for the three months ended December 31, 2018. This increase was due primarily to the contribution of $2.0 million of operating expenses incurred by our newly acquired subsidiaries, higher research and development costs associated with the development of automated drug testing assays, and increased professional fees associated with business development work including $797,000 associated with the Diversigen acquisition, partially offset by a decline in employee bonus accruals and stock compensation expense, the amount of which is directly related to Company and individual performance. Fourth quarter 2018 operating expenses included $1.2 million of transaction costs associated with the Company’s acquisitions of CoreBiome and Novosanis.
The Company generated operating income of $4.1 million in the fourth quarter of 2019 compared to operating income of $12.5 million in the fourth quarter of 2018.
During the fourth quarter of 2019, the Company recorded income tax expense of $2.1 million compared to $3.8 million recorded in the fourth quarter of 2018. This decrease largely reflects the lower pre-tax income generated by the Company’s Canadian subsidiary.
The Company’s cash and investment balance totaled $189.8 million at December 31, 2019, compared to $201.3 million at December 31, 2018. For the year ended December 31, 2019, the Company generated $9.8 million in cash from operations compared with $39.1 million in the same period of 2018.
Full-Year 2020 Guidance
The Company expects consolidated net revenues for the year ended December 31, 2020 to range from $145.0 million to $155.0 million and is projecting a net loss of $0.07 to $0.10 per share. These projections do not account for the impact of changes in the fair value of acquisition-related contingent consideration or any potential transaction costs related to future business development activity since those items cannot be fully determined at this time. “We expect 2020 to be a building year for the OraSure family of companies as we focus on revenue growth by continuing to invest in our core businesses and leveraging our balance sheet to accelerate our innovation growth strategy,” added Dr. Tang.
Financial Data
Condensed Consolidated Financial Data
(in thousands, except per-share data)
(Unaudited)
| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||
| Results of Operations | |||||||||||||||||
| Net revenues | $ | 49,668 | $ | 50,246 | $ | 154,605 | $ | 181,743 | |||||||||
| Cost of products sold | 19,829 | 15,540 | 60,022 | 68,130 | |||||||||||||
| Gross profit | 29,839 | 34,706 | 94,583 | 113,613 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Research and development | 6,104 | 4,059 | 19,629 | 16,250 | |||||||||||||
| Sales and marketing | 7,932 | 8,377 | 31,869 | 30,609 | |||||||||||||
| General and administrative | 11,539 | 9,758 | 35,287 | 38,325 | |||||||||||||
| Change in fair value of acquisition-related contingent consideration | 179 | — | (664 | ) | — | ||||||||||||
| Gain on sale of business | — | — | (10,149 | ) | — | ||||||||||||
| Total operating expenses | 25,754 | 22,194 | 75,972 | 85,184 | |||||||||||||
| Operating income | 4,085 | 12,512 | 18,611 | 28,429 | |||||||||||||
| Other income | 477 | 1,629 | 2,720 | 3,287 | |||||||||||||
| Income before income taxes | 4,562 | 14,141 | 21,331 | 31,716 | |||||||||||||
| Income tax expense | 2,124 | 3,843 | 4,675 | 11,320 | |||||||||||||
| Net income | $ | 2,438 | $ | 10,298 | $ | 16,656 | $ | 20,396 | |||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | 0.04 | $ | 0.17 | $ | 0.27 | $ | 0.33 | |||||||||
| Diluted | $ | 0.04 | $ | 0.16 | $ | 0.27 | $ | 0.33 | |||||||||
| Weighted average shares: | |||||||||||||||||
| Basic | 61,729 | 61,268 | 61,675 | 61,112 | |||||||||||||
| Diluted | 62,199 | 62,511 | 62,170 | 62,532 | |||||||||||||
Summary of Net Revenues by Market and Product (Unaudited)
| Three Months Ended December 31, | |||||||||||||||||||||||
| Dollars | Percentage of Total Net Revenues | ||||||||||||||||||||||
| 2019 | 2018 | % Change | 2019 | 2018 | |||||||||||||||||||
| Market | |||||||||||||||||||||||
| Infectious disease testing | $ | 18,743 | $ | 13,643 | 37 | % | 38 | % | 27 | % | |||||||||||||
| Risk assessment testing | 2,944 | 2,898 | 2 | 6 | 6 | ||||||||||||||||||
| Cryosurgical systems | — | 2,894 | (100 | ) | — | 6 | |||||||||||||||||
| Molecular collection systems | 25,487 | 25,407 | — | 51 | 50 | ||||||||||||||||||
| Net product and service revenues | 47,174 | 44,842 | 5 | 95 | 89 | ||||||||||||||||||
| Royalty income | 2,160 | 4,826 | (55 | ) | 4 | 10 | |||||||||||||||||
| Other | 334 | 578 | (42 | ) | 1 | 1 | |||||||||||||||||
| Net revenues | $ | 49,668 | $ | 50,246 | (1 | ) | % | 100 | % | 100 | % | ||||||||||||
| Year Ended December 31, | ||||||||||||||||||||||
| Dollars | Percentage of Total Net Revenues | |||||||||||||||||||||
| 2019 | 2018 | % Change | 2019 | 2018 | ||||||||||||||||||
| Market | ||||||||||||||||||||||
| Infectious disease testing | $ | 58,016 | $ | 56,148 | 3 | % | 38 | % | 31 | % | ||||||||||||
| Risk assessment testing | 12,189 | 12,058 | 1 | 8 | 7 | |||||||||||||||||
| Cryosurgical systems | 7,054 | 10,767 | (34 | ) | 5 | 6 | ||||||||||||||||
| Molecular collection systems | 70,814 | 86,455 | (18 | ) | 45 | 47 | ||||||||||||||||
| Net product and service revenues | 148,073 | 165,428 | (10 | ) | 96 |
By: GlobeNewswire
- 19 Feb 2020
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