EX-99 2 ex99-1101607.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 THIRD QUARTER RESULTS

NET INCOME INCREASES 31%

 

ST. PAUL, October 16, 2007 – MEDTOX Scientific, Inc. (Nasdaq:MTOX) announced today results for the third quarter ended September 30, 2007.

 

•

Revenues increased $2,039,000 to $20,759,000, or 11%

 

•

Consolidated gross margin remained at 46%

 

•

Operating margin increased to 15% from 14%

 

•

Net income increased $463,000 to $1,939,000, or 31%

For the three-month period ended September 30, 2007, revenues increased to $20,759,000 compared to $18,720,000 from the prior-year period. Operating income increased to $3,050,000 compared to $2,646,000 from the prior-year period. The Company recorded net income of $1,939,000, or $0.22 per diluted share, compared to net income of $1,476,000, or $0.17 per diluted share, or a 31% increase in net income from the comparable period last year.

For the nine-month period ended September 30, 2007, revenues increased to $60,561,000 compared to $52,469,000, or 15%, from the prior-year period. Operating income increased to $8,130,000 compared to $6,521,000, from the comparable period last year. Net income increased to $5,255,000, or $0.59 per diluted share, compared to net income of $3,512,000, or $0.40 per diluted share, or an increase of 50% in net income from the comparable period last year.

Consolidated revenue growth for the quarter was consistent with our annualized growth rates since 2003. Both product sales at 26% and DAU (drugs-of-abuse laboratory) at 13% showed strong growth in the quarter. Specialty Laboratory Services revenues were down 3% in the quarter compared to the same quarter last year.

 

MEDTOX Scientific, Inc.

October 16, 2007

Page 2

 

This reduction was attributable to lower revenues in our higher margin Clinical Trial Services (CTS) portion of the Specialty Lab. As the Company has consistently stated, CTS is project oriented and may demonstrate a pattern of variability in quarter to quarter comparisons. In the current quarter, a number of scheduled projects were moved by sponsors into Q4 2007 and Q1 2008. The trend for our clinical lab is positive year-to-date and our current expectation is that it will remain positive through year-end.

Overall, expenses for the quarter were in line with expectations. Total selling, general and administrative expenses for the quarter were 28% of revenues, down from 29% of revenues for the same period last year. Research and development expenses increased 3.5% to $599,000 for the quarter from $579,000 in the comparable period last year.

MEDTOX will hold a teleconference to discuss third quarter 2007 results today at 9:30 a.m. Central Time (10:30 a.m. Eastern). Dialing (888) 230-5944 a few minutes prior to the scheduled start time on October 16 will access a listen-only broadcast of the teleconference. International callers may access the call by dialing (913) 981-5542. 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 October 23 at (888) 203-1112 conference ID #1001784. International callers may access the replay at (719) 457-0820 with the same conference ID #1001784.

MEDTOX Scientific, Inc., headquartered in St. Paul, Minn., is a provider of high quality specialized laboratory testing services and on-site/point-of-collection 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 2006 Annual Report on Form 10-K.

 

MEDTOX Scientific, Inc.

October 16, 2007

Page 3

MEDTOX SCIENTIFIC, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2007

 

2006

 

2007

 

2006

REVENUES:

 

 

 

 

 

 

 

Laboratory services

$ 15,723

 

$ 14,725

 

$ 46,499

 

$ 40,540

Product sales

5,036

 

3,995

 

14,062

 

11,929

 

20,759

 

18,720

 

60,561

 

52,469

 

 

 

 

 

 

 

 

COST OF REVENUES:

 

 

 

 

 

 

 

Cost of services

9,322

 

8,555

 

27,431

 

24,364

Cost of sales

1,936

 

1,525

 

5,310

 

4,585

 

11,258

 

10,080

 

32,741

 

28,949

 

 

 

 

 

 

 

 

GROSS PROFIT

9,501

 

8,640

 

27,820

 

23,520

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

Selling, general and administrative

5,852

 

5,415

 

17,726

 

15,429

Research and development

599

 

579

 

1,964

 

1,570

 

6,451

 

5,994

 

19,690

 

16,999

 

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

3,050

 

2,646

 

8,130

 

6,521

 

 

 

 

 

 

 

 

OTHER EXPENSE:

 

 

 

 

 

 

 

Interest expense

(42

)

(99

)

(139

)

(372)

Other expense, net

(136

)

(143

)

(280

)

(429)

 

(178

)

(242

)

(419

)

(801)

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX EXPENSE

2,872

 

2,404

 

7,711

 

5,720

 

 

 

 

 

 

 

 

INCOME TAX EXPENSE

(933

)

(928

)

(2,456

)

(2,208)

 

 

 

 

 

 

 

 

NET INCOME

$ 1,939

 

$ 1,476

 

$ 5,255

 

$ 3,512

 

 

 

 

 

 

 

 

BASIC EARNINGS PER COMMON SHARE

$ 0.23

 

$ 0.18

 

$ 0.63

 

$ 0.43

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER COMMON SHARE

$ 0.22

 

$ 0.17

 

$ 0.59

 

$ 0.40

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING:

 

 

 

 

 

 

 

Basic

8,397,882

 

8,178,489

 

8,286,551

 

8,161,176

Diluted

9,010,490

 

8,802,279

 

8,891,581

 

8,775,285

MEDTOX Scientific, Inc.

October 16, 2007

Page 4

 

MEDTOX SCIENTIFIC, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

 

 

 

September 30,

2007

 

December 31,

2006

 

ASSETS

 

 

 

 

Cash and cash equivalents

$ 2,003

 

$ 1,261

 

Accounts receivable, net

15,350

 

11,067

 

Inventories

3,518

 

3,538

 

Other current assets

2,266

 

2,841

 

Total current assets

23,137

 

18,707

 

 

 

 

 

 

Building, equipment and improvements, net

24,106

 

19,572

 

 

 

 

 

 

Other assets

19,566

 

21,595

 

Total assets

$ 66,809

 

$ 59,874

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities

$ 11,774

 

$ 8,892

 

 

 

 

 

 

Long-term obligations

2,816

 

3,038

 

 

 

 

 

 

Stockholders’ equity

52,219

 

47,944

 

Total liabilities and stockholders’ equity

$ 66,809

 

$ 59,874