EX-99 2 ex99-1071706.htm EXHIBIT 99.1

Exhibit 99.1

MEDTOX Scientific, Inc.

402 West County Road D

St. Paul, MN 55112

Contact: Paula Perry (877) 715-7236

 

FOR IMMEDIATE RELEASE

 

MEDTOX SCIENTIFIC ANNOUNCES RECORD

SECOND QUARTER AND YEAR-TO-DATE NET INCOME

 

ST. PAUL, July 17, 2006 – MEDTOX Scientific, Inc. (Nasdaq:MTOX) announced today results for the second quarter ended June 30, 2006.

For the six-month period, revenues increased to $33,749,000, compared to $31,534,000, or 7.0%, from the prior-year period. Operating income increased to $3,875,000 compared to $2,962,000, or 30.8%, from the prior-year period. The Company recorded net income of $2,036,000, or $0.23 per diluted share, compared to net income of $1,436,000, or $0.18 per diluted share, or a 41.8% increase in net income from the comparable period last year.

For the three-month period ended June 30, 2006, revenues increased to $17,399,000 compared to $16,845,000, or 3.3%, from the prior-year period. Operating income increased to $2,325,000 compared to $1,950,000, or 19.2%, from the comparable period last year. Net income increased to $1,282,000, or $0.15 per diluted share, compared to net income of $1,015,000, or $0.13 per diluted share, or a 26.3% increase in net income from the comparable period last year.

Overall, expenses for the quarter were in line with expectations. Total operating expenses were 31.1% of revenues for the quarter compared to 32.9% for the comparable period last year. Total operating expenses were 32.6% year-to-date compared to 33.2% for the comparable period last year. Gross margin for the quarter was 44.5% compared to 44.4% for the comparable period last year. Gross margin year-to-date was 44.1% compared to 42.6% for the comparable period last year.

 


MEDTOX Scientific, Inc.

July 17, 2006

Page 2

 

 

Although there was a reduction in hiring activity by existing clients in the second quarter, the new account activity was strong which resulted in record revenues, operating income, pre-tax income and net income for the quarter. The Company has implemented a number of initiatives to compensate for lower activity from existing clients that it believes will have a positive benefit in the second half of 2006. These initiatives will be discussed during the Company’s teleconference to be held this morning.

MEDTOX will hold a teleconference to discuss second quarter 2006 results today at 9:30 a.m. Central Time (10:30 a.m. Eastern). Dialing 877-421-3959 a few minutes prior to the scheduled start time on July 17 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 24 at 800-642-1687 conference ID # 2234420. International callers may access the replay at 706-645-9291 with the same conference ID # 2234420.

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 2005 Annual Report on Form 10-K.

 


MEDTOX Scientific, Inc.

July 17, 2006

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, 2006

 

June 30, 2005

 

June 30, 2006

 

June 30, 2005

 

 

 

 

 

 

 

 

REVENUES:

 

 

 

 

 

 

 

Laboratory services

$ 13,413

 

$ 12,920

 

$ 25,815

 

$ 24,068

Product sales

3,986

 

3,925

 

7,934

 

7,466

 

17,399

 

16,845

 

33,749

 

31,534

 

 

 

 

 

 

 

 

COST OF REVENUES:

 

 

 

 

 

 

 

Cost of services

8,175

 

7,750

 

15,809

 

14,975

Cost of sales

1,488

 

1,611

 

3,060

 

3,117

 

9,663

 

9,361

 

18,869

 

18,092

 

 

 

 

 

 

 

 

GROSS PROFIT

7,736

 

7,484

 

14,880

 

13,442

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

Selling, general and administrative

4,880

 

4,896

 

10,014

 

9,244

Research and development

531

 

638

 

991

 

1,236

 

5,411

 

5,534

 

11,005

 

10,480

 

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

2,325

 

1,950

 

3,875

 

2,962

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

Interest expense

(119

)

(227

)

(273

)

(438)

Other expense, net

(118

)

(86

)

(286

)

(208)

 

(237

)

(313

)

(559

)

(646)

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX EXPENSE

2,088

 

1,637

 

3,316

 

2,316

 

 

 

 

 

 

 

 

INCOME TAX EXPENSE

(806

)

(622

)

(1,280

)

(880)

 

 

 

 

 

 

 

 

NET INCOME

$ 1,282

 

$ 1,015

 

$ 2,036

 

$ 1,436

 

 

 

 

 

 

 

 

BASIC EARNINGS PER COMMON

SHARE

$ 0.16

 

$ 0.13

 

$ 0.25

 

$ 0.19

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER COMMON

SHARE

$ 0.15

 

$ 0.13

 

$ 0.23

 

$ 0.18

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF

SHARES OUTSTANDING:

 

 

 

 

 

 

 

Basic

8,183,455

 

7,546,972

 

8,169,106

 

7,543,746

Diluted

8,839,176

 

7,929,546

 

8,786,645

 

8,070,235

 

 


MEDTOX Scientific, Inc.

July 17, 2006

Page 4

 

 

MEDTOX SCIENTIFIC, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

June 30,

2006

 

December 31,

2005

 

ASSETS

 

 

 

 

Cash and cash equivalents

$ 847

 

$ 1,312

 

Accounts receivable

11,691

 

9,889

 

Inventories

3,281

 

3,301

 

Other current assets

2,378

 

2,627

 

Total current assets

18,197

 

17,129

 

 

 

 

 

 

Building, equipment and improvements, net

18,704

 

17,927

 

 

 

 

 

 

Other assets

22,861

 

24,334

 

Total assets

$ 59,762

 

$ 59,390

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities

$ 10,445

 

$ 8,752

 

 

 

 

 

 

Long-term obligations

3,426

 

5,793

 

 

 

 

 

 

Stockholders’ equity

45,891

 

44,845

 

Total liabilities and stockholders’ equity

$ 59,762

 

$ 59,390