ST. PAUL, Minn., April 16, 2008 (PRIME NEWSWIRE) -- MEDTOX Scientific, Inc. (Nasdaq:MTOX) today announced results for the first quarter ended March 31, 2008:
* Revenues for the quarter increased $1.7 million to $20.7 million,
or 8.8%
* Gross profit for the quarter increased $430,000 to $9.2 million, or
4.9%
* Operating expenses decreased as a percentage of revenues to 31.3%
from 33.2%
* Operating income for the quarter increased to $2.7 million or 11.4%
* Operating margin increased to 13.0% from 12.7%
* Pre-tax income was $2.5 million up 12.3%
* Diluted EPS for the quarter was $0.18 the same as last year which
reflects a 36.5% tax rate for the quarter, compared to 30.1% last
year.
For the three-month period, revenues were $20,705,000, compared to $19,026,000 from the prior-year period. The Company recorded operating income of $2,697,000 for the three-month period, compared to $2,420,000 for the prior-year period. The Company recorded net income of $1,587,000, or $0.18 per diluted share for the three-month period, compared to $1,555,000, or $0.18 per diluted share for the prior-year period.
The Diagnostic Segment had an excellent quarter increasing revenue by 27.6% to a record $5.2 million. The revenue growth drove an increase in operating margin in the segment to 24.8% from 15.8%. This would indicate that to date there has not been a significant negative impact from the recall of our reader in the ER market. As we noted in a previous filing, we have submitted a 510(k) application to the FDA for "prescription use" marketing approval for the reader in order to place it back into the market, both to satisfy existing customers and to grow the customer base.
The Laboratory Segment was negatively impacted in the quarter by a 3% reduction in revenue from existing workplace drugs-of-abuse clients. We believe that the reduced test volume from existing clients is attributable to economic conditions affecting hiring decisions. Laboratory expenses were higher by $300,000 in the quarter attributable to expansion of our clinical laboratory, which we announced at our year-end conference call. These increased expenses negatively affected both earnings and Laboratory gross margin, since, to date, we have generated only a small amount of incremental revenue as a result of the expansion. As we have stated previously we are taking a long term view, but our expectation is to begin to see a more positive contribution in the second half of the year.
On a comparative basis year over year, the first quarter of 2007 was extremely strong in the Laboratory Segment especially in our clinical trials services (CTS) which is project oriented and therefore more variable from quarter to quarter. Additionally, the tax rate for last year's first quarter was 30.1% compared to 36.5% in the current quarter, which negatively affects the quarter over quarter comparison for both net income and fully diluted EPS.
Results for the first quarter were consistent with our expectations. Based on our strong performance in the Diagnostics Segment, successful emphasis on expense control, growing number of signed protocols in CTS and new service offerings in our laboratory, we are well positioned for the rest of 2008.
MEDTOX will hold a teleconference to discuss first quarter 2008 results today at 9:30 a.m. Central Time (10:30 a.m. Eastern).
