EX-99 2 dex99.htm PRESS RELEASE Press Release

Exhibit 99

LOGO

Company Contact:

Ronald H. Spair

Chief Financial Officer

610-882-1820

Investorinfo@orasure.com

www.orasure.com

OraSure Technologies Announces Record 2007 Second Quarter Results

- Increases 2007 Full Year Revenue Guidance -

BETHLEHEM, PA – July 31, 2007 – (BW HealthWire) – OraSure Technologies, Inc. (NASDAQ: OSUR), a market leader in oral fluid diagnostics, today announced record quarterly revenues of $21.4 million for the three months ended June 30, 2007, a 22% increase over the $17.6 million in revenues recorded for the three months ended June 30, 2006. Increased sales of the Company’s OraQuick ADVANCE® rapid HIV-1/2 antibody test, substance abuse testing products and international over-the-counter (“OTC”) cryosurgery products, together with an increase in funded research and development related to the Company’s rapid Hepatitis C (“HCV”) test, contributed to the increase in total revenues during the second quarter.

The Company’s net income was $955,000 or $0.02 per share on a fully-diluted basis for the second quarter of 2007, compared to net income of $1.2 million, or $0.03 per share on a fully-diluted basis for the second quarter of 2006. This decrease is primarily the result of higher operating expenses during the current quarter, as described below.

For the six months ended June 30, 2007, the Company recorded revenues of $41.5 million, an increase of 26% when compared to revenues of $32.8 million for the six months ended June 30, 2006. The Company recorded net income of $2.4 million, or $0.05 per share on a fully-diluted basis, for the six months ended June 30, 2007, compared to net income of $2.1 million, or $0.04 per share on a fully-diluted basis, during the six months ended June 30, 2006.

Gross margin remained at 63% for both the three-month and six-month periods ended June 30, 2007 and 2006.

Operating expenses for the second quarter of 2007 increased to $12.9 million from $9.7 million in the second quarter of 2006. Operating expenses for the six months ended June 30, 2007 were $24.8 million, compared to $18.4 million for the comparable period in 2006. These increases were primarily attributable to higher research and development costs associated with the product development and clinical work for an OraQuick ADVANCE® HIV test for home use and an OraQuick® HCV test for professional use, higher staffing


related expenses, higher legal expenses, and additional consulting expenses related to long-range facilities planning and the implementation of the Company’s new enterprise resource planning system.

“We are very pleased with the Company’s financial results in the second quarter,” said Douglas A. Michels, President and Chief Executive Officer of OraSure Technologies. “Continued growth in infectious disease testing, substance abuse testing and international OTC cryosurgical systems revenues has resulted in yet another excellent quarter. We also made good progress during the quarter towards achieving our long-term strategic initiatives. We continue to believe that 2007 will be a very successful year for our Company, both financially and strategically.”

Cash, cash equivalents and short-term investments totaled $89.1 million and working capital was $103.9 million at June 30, 2007, compared to $91.0 million and $96.0 million, respectively, at December 31, 2006.

Cash flow from operations for the six months ended June 30, 2007 was $2.7 million, compared to $8.2 million for the comparable period in 2006. The decrease of $5.5 million was primarily the result of increases in accounts receivable and inventories, offset by an increase in accounts payable and accrued expenses during the current six-month period.

2007 Financial Guidance

Based on the Company’s strong performance during the first six months of 2007 and expected increases in sales of OTC cryosurgery products, the Company expects revenues of $21.0 to $21.5 million in the third quarter and is increasing full-year 2007 revenue guidance to approximately $83.0 million. Fully diluted earnings per share are expected to range from breakeven to $0.01 per share in the third quarter and to be approximately $0.05 per share for the full year.


Condensed Financial Data

(In thousands, except per-share

data and percentages)

Unaudited

 

     Three months ended
June 30,
   Six months ended
June 30,
Results of Operations    2007    2006    2007    2006

Revenues

   $ 21,352    $ 17,564    $ 41,461    $ 32,782

Cost of products sold

     7,889      6,532      15,474      12,151

Gross profit

     13,463      11,032      25,987      20,631

Operating expenses:

           

Research and development

     3,304      1,748      6,224      3,397

Acquired in-process technology

     —        600      —        600

Sales and marketing

     5,249      4,238      10,020      8,345

General and administrative

     4,325      3,143      8,562      6,100
                           

Total operating expenses

     12,878      9,729      24,806      18,442
                           

Operating income

     585      1,303      1,181      2,189

Other income, net

     969      896      3,358      1,687

Income tax provision

     599      991      2,098      1,768
                           

Net income

   $ 955    $ 1,208    $ 2,441    $ 2,108
                           

Earnings per share:

           

Basic

   $ 0.02    $ 0.03    $ 0.05    $ 0.05
                           

Diluted

   $ 0.02    $ 0.03    $ 0.05    $ 0.04
                           

Weighted average shares:

           

Basic

     46,215      45,902      46,165      45,871
                           

Diluted

     46,629      46,731      46,592      46,783
                           

 

     Three months ended June 30,  
                     Percentage of  
     Dollars    %     Total Revenues  
Market Revenues    2007    2006    Change     2007     2006  

Infectious disease testing

   $ 9,185    $ 7,561    21 %   43 %   43 %

Substance abuse testing

     4,396      4,039    9     21     23  

Cryosurgical systems

     5,772      4,580    26     27     26  

Insurance risk assessment

     1,350      1,307    3     6     7  
                            

Product revenues

     20,703      17,487    18     97     99  

Licensing and product development

     649      77    743     3     1  
                            

Total revenues

   $ 21,352    $ 17,564    22 %   100 %   100 %
                            


                    Six months ended June 30,  
                                    Percentage of  
                    Dollars    %
Change
    Total Revenues  

Market Revenues

                  2007    2006      2007     2006  

Infectious disease testing

            $ 18,117    $ 13,702    32 %   44 %   42 %

Substance abuse testing

              8,325      7,481    11     20     23  

Cryosurgical systems

              11,452      9,038    27     28     27  

Insurance risk assessment

              2,239      2,394    (6 )   5     7  
                                     

Product revenues

              40,133      32,615    23     97     99  

Licensing and product development

              1,328      167    695     3     1  
                                     

Total revenues

            $ 41,461    $ 32,782    26 %   100 %   100 %
                                     

 

          Three months ended          Six months ended       
          June 30,   

%

Change

    June 30,   

%

Change

 

OraQuick® Revenues

        2007    2006      2007    2006   

Direct to U.S. Public Health

      $ 5,502    $ 4,061    35 %   $ 9,846    $ 6,958    41 %

Abbott

        1,778      2,090    (15 )     3,928      3,572    10  

SAMHSA

        5      —      N/A       334      256    31  

CDC

        480      261    84       1,100      261    322  

International

        514      230    123       1,260      791    60  
                                   

Total OraQuick® revenues

      $ 8,279    $ 6,642    25 %   $ 16,468    $ 11,838    39 %
                                   
          Three months ended          Six months ended       
          June 30,   

%

Change

    June 30,    %
Change
 

Intercept® Revenues

        2007    2006      2007    2006   

Workplace testing

      $ 1,977    $ 1,764    12 %   $ 3,523    $ 3,044    16 %

Criminal Justice

        661      596    11       1,306      1,130    16  

International

        633      469    35       1,233      1,026    20  

Direct

        264      217    22       466      354    32  
                                   

Total Intercept® revenues

      $ 3,535    $ 3,046    16 %   $ 6,528    $ 5,554    17 %
                                   
          Three months ended          Six months ended       
          June 30,   

%

Change

    June 30,   

%

Change

 

Cryosurgical Systems Revenues

        2007    2006      2007    2006   

Professional domestic

      $ 1,360    $ 1,313    4 %   $ 2,413    $ 2,401    0 %

Professional international

        510      550    (7 )     977      921    6  

OTC domestic

        983      2,137    (54 )     3,133      3,956    (21 )

OTC international

        2,919      580    403       4,929      1,760    180  
                                   

Total revenues

      $ 5,772    $ 4,580    26 %   $ 11,452    $ 9,038    27 %
                                   


     Unaudited
Balance Sheets    June 30, 2007    December 31, 2006
Assets      

Cash, cash equivalents and short-term

investments

   $ 89,108    $ 91,001

Accounts receivable, net

     14,848      10,357

Inventories

     7,023      5,535

Current portion of deferred income taxes

     5,291      3,676

Other current assets

     1,765      1,989

Property and equipment, net

     19,116      17,375

Deferred income taxes

     16,776      19,846

Other non-current assets

     5,917      6,786
             

Total assets

   $ 159,844    $ 156,565
             
Liabilities and Stockholders’ Equity      

Current portion of long-term debt

   $ 591    $ 609

Accounts payable

     4,379      3,312

Accrued expenses

     9,198      12,659

Long-term debt, less current portion

     9,985      10,030

Other liabilities

     551      451

Stockholders’ equity

     135,140      129,504
             

Total liabilities and stockholders’ equity

   $ 159,844    $ 156,565
             

 

     As of June 30,
Additional Financial Data    2007    2006

Capital expenditures

   $ 2,598    $ 10,777

Depreciation and amortization

   $ 1,321    $ 896

Accounts receivable – days sales outstanding

     63 days      52 days

Conference Call

The Company will host a conference call and audio webcast today to discuss the Company’s 2007 second quarter financial results, business developments and the Company’s 2007 outlook, beginning 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, and Ronald H. Spair, Chief Operating Officer and Chief Financial Officer. The call will include remarks by management and a question and answer session.

In order to listen to the conference call, please dial 888-742-2024 (Domestic) or 706-643-0033 (International) and reference 6857742 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 August 7, 2007, by dialing 800-642-1687 (Domestic) or 706-645-9291 (International) and entering the Conference ID #6857742.


About OraSure Technologies

OraSure Technologies develops, manufactures and markets oral fluid specimen collection devices and tests and other diagnostic products using its proprietary technologies, including immunoassays and other in vitro diagnostic tests and other medical devices. These products are sold in the United States and certain foreign countries to clinical laboratories, hospitals, clinics, community-based organizations and other public health organizations, distributors, government agencies, physicians’ offices, and commercial and industrial entities. 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 revenues, net income and products. Actual results could be significantly different. Factors that could affect results include the ability to market and sell products; changes in relationships, including disputes or disagreements, with strategic partners 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 competitors, competing products and technology changes; ability to develop, commercialize and market new products; market acceptance of oral fluid testing or other products; changes in market acceptance of products based on product performance; continued bulk purchases by customers, including governmental agencies, and the ability to fully deploy those purchases in a timely manner; 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; 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; history of losses and ability to achieve sustained profitability; 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; loss or impairment of sources of capital; ability to meet financial covenants in agreements with financial institutions; ability to retain qualified personnel; exposure to product liability, patent infringement, 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; ability to complete consolidation or restructuring activities; ability to identify, complete and realize the full benefits of potential acquisitions; and general political, business and economic conditions. These and other factors are discussed more fully in the Securities and Exchange Commission (“SEC”) filings of OraSure Technologies, including its registration statements, its Annual Report on Form 10-K for the year ended December 31, 2006, its Quarterly Reports on Form 10-Q, and its other filings with the SEC. Although forward-looking statements help to provide complete 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.

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