EX-99 2 ex99-1071505.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1

MEDTOX Scientific, Inc.
402 West County Road D
St. Paul, MN 55112
Contact: Joseph Jennings (877) 715-7236

FOR IMMEDIATE RELEASE

MEDTOX SCIENTIFIC ANNOUNCES
SECOND QUARTER RESULTS

ST.  PAUL, July 15, 2005 – MEDTOX Scientific, Inc. (AMEX-TOX) announced today results for the second quarter ended June 30, 2005. For the three-month period, revenues increased to $16,845,000, compared to $15,064,000, or 11.8%, from the prior-year period. Operating income increased to $1,950,000 compared to $1,541,000, or 26.5%, from the prior-year period. The Company recorded net income of $1,015,000, or $0.13 per diluted share, compared to net income of $728,000, or $0.09 per diluted share, or a 39.4% increase in net income from the comparable period last year.

For the six-month period ended June 30, 2005, revenues increased to $31,534,000 compared to $28,647,000, or 10.1%, from the prior-year period. Operating income increased to $2,962,000 compared to $2,606,000, or 13.7%, for the comparable period last year. Net income increased to $1,436,000, or $0.18 per diluted share, compared to net income of $1,142,000, or $0.15 per diluted share, or an increase of 25.7% in net income from the comparable period last year.

Overall, expenses for the quarter were in line with expectations. Total operating expenses were 32.9% of revenues for the quarter compared to 33.7% for the comparable period last year. Research and development expenses increased 49.8% to $638,000 for the quarter from $426,000 in the comparable period last year. The Diagnostic segment incurred $148,000, or 69.8%, of the increase.

MEDTOX will hold a teleconference to discuss second quarter 2005 results today at 9:30 a.m. Central Time (10:30 a.m. Eastern). Dialing 800-387-5648 a few minutes prior to the scheduled start time on July 15 will access a listen-only broadcast of the teleconference. International callers may access the call by dialing 706-634-5527. Callers should ask for the MEDTOX quarterly conference call, hosted by Dick Braun, president and CEO of MEDTOX. A simultaneous webcast of the conference call will be available on the MEDTOX website in the “investors” section at www.medtox.com. An audio replay of the conference call will be available through July 22 at 800-642-1687 conference ID #7336289. International callers may access the replay at 706-645-9291 with the same conference ID #7336289.


MEDTOX Scientific, Inc.
July 15, 2005
Page 2

MEDTOX Scientific, Inc., headquartered in St. Paul, Minn., is a provider of high quality specialized laboratory testing services and on-site/point-of-collection (POC) devices. The company also supports customers with complete logistics, data and program management services. MEDTOX is a leader in providing esoteric laboratory testing services to hospitals and laboratories nationwide. This includes both central laboratory and bio-analytical testing for pharmaceutical clinical trials. MEDTOX develops and manufactures diagnostic devices for quick and economical on-site/point-of-collection analysis for drugs-of-abuse, therapeutic drugs and biological and agricultural toxins and provides employment drug screening and occupational health testing. For more information see www.medtox.com.

Note: Forward-looking statements contained in this press release are made under the Private Securities Reform Act of 1995. Actual results may differ due to a number of factors including a change in the employment pattern of client companies, the ability of MEDTOX to acquire new business, and changes in the competitive environment. Further discussions of factors that may cause such results to differ are identified in the Company’s 2004 Annual Report on Form 10-K.


MEDTOX Scientific, Inc.
July 15, 2005
Page 3

MEDTOX SCIENTIFIC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)

   
Three Months Ended Six Months Ended
June 30, 2005
June 30, 2004
June 30, 2005
June 30, 2004
REVENUES:                    
   Laboratory services   $ 12,920   $ 11,497   $ 24,068   $ 21,715  
   Product sales    3,925    3,567    7,466    6,932  




     16,845    15,064    31,534    28,647  
COST OF REVENUES:  
  Cost of services    7,750    7,053    14,975    13,583  
  Cost of sales    1,611    1,398    3,117    2,710  




     9,361    8,451    18,092    16,293  




GROSS PROFIT    7,484    6,613    13,442    12,354  
   
OPERATING EXPENSES:  
   Selling, general and administrative    4,896    4,646    9,244    8,913  
   Research and development    638    426    1,236    835  




     5,534    5,072    10,480    9,748  




INCOME FROM OPERATIONS    1,950    1,541    2,962    2,606  
   
OTHER INCOME (EXPENSE):  
   Interest expense    (227 )  (260 )  (438 )  (526 )
   Other expense, net    (86 )  (106 )  (208 )  (238 )




     (313 )  (366 )  (646 )  (764 )




INCOME BEFORE INCOME TAX EXPENSE    1,637    1,175    2,316    1,842  
   
INCOME TAX EXPENSE    (622 )  (447 )  (880 )  (700 )




NET INCOME   $ 1,015   $ 728   $ 1,436   $ 1,142  




BASIC EARNINGS PER COMMON SHARE (1)   $ 0.13   $ 0.10   $ 0.19   $ 0.15  




DILUTED EARNINGS PER COMMON  
SHARE (1)   $ 0.13   $ 0.09   $ 0.18   $ 0.15  




WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:  
          Basic (1)    7,546,972    7,451,628    7,543,746    7,458,696  
          Diluted (1)    7,929,546    7,825,406    8,070,235    7,776,827  

(1)     Share and per share amounts for the three and six months ended June 30, 2004 have been restated for the three-for-two stock split paid on August 20, 2004.


MEDTOX Scientific, Inc.
July 15, 2005
Page 4

MEDTOX SCIENTIFIC, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

June 30,
2005

December 31,
2004

ASSETS            
   Cash and cash equivalents   $ 1,033   $ 263  
   Accounts receivable, net    10,964    8,287  
   Inventories    3,198    3,624  
   Other current assets    2,890    2,824  


         Total current assets    18,085    14,998  
    
   Building, equipment and improvements, net    16,919    16,348  
    
   Other assets    23,472    24,614  


         Total assets   $ 58,476   $ 55,960  


LIABILITIES AND STOCKHOLDERS' EQUITY   
   Current liabilities   $ 13,201   $ 12,081  
    
   Long-term obligations    5,947    6,090  
    
   Stockholders' equity    39,328    37,789  


         Total liabilities and stockholders' equity   $ 58,476   $ 55,960