Provides Full Year 2009 Financial Guidance
Home Diagnostics, Inc. (Nasdaq:HDIX), a leading manufacturer and
marketer of diabetes testing supplies, today announced financial results
for the first quarter ended March 31, 2009.
Total revenue for the first quarter was $24.6 million, a decrease of
2.1% from $25.1 million in the first quarter of 2008. Retail channel
sales were up 25.2%, driven by the continued nationwide rollout of the
TRUEresult and TRUE2go blood glucose monitoring systems and the rollout
of TRUEtrack at Walmart. Mail service channel sales increased 21.8%,
driven by continued success of the private label, no-coding blood
glucose monitoring system recently launched with Liberty Medical.
Distribution channel sales decreased 19.0% as a result of reductions in
inventory days supply by some of the Company’s wholesale distribution
customers. International sales decreased 32.0%, driven primarily by
reduced sales to a distributor in Latin America.
Gross profit for the first quarter of 2009 was $11.6 million, compared
to $14.6 million in the first quarter of 2008. As a percentage of sales,
gross margin decreased to 47.1% compared to 58.1% in the prior year
period. As the Company previously guided, gross margin was negatively
impacted by the continued investment in the roll out of the new no-code
products in the retail and mail service channels. Gross margin was also
impacted by lower pricing in the mail service and distribution channels.
Selling, general and administrative expenses were $12.1 million for the
first quarter of 2009, compared with $11.9 million in the first quarter
of 2008. First quarter 2009 selling, general and administrative included
$0.4 million of severance and other expenses related to the Company’s
CEO transition.
Research and development expenses were $1.9 million for the first
quarter of 2009, compared with $2.4 million in the first quarter of
2008. The decrease in research and development is primarily due to lower
new product development costs following the launch of the TRUE2go and
TRUEresult systems.
Operating loss for the first quarter of 2009 was $2.4 million, compared
to operating income of $0.4 million for the first quarter of 2008.
For the three-month period ended March 31, 2009, the Company reported a
net loss of $1.7 million, or a loss of $0.10 per diluted share, based on
weighted average shares outstanding of 17.3 million. Net income for the
three-month period ended March 31, 2008 was $0.7 million, or $0.04 per
diluted share, based on 19.0 million weighted average shares outstanding.
In March 2009, the Company received 510(k) clearance from the U.S. Food
and Drug Administration (FDA) for TRUEbalance, the Company’s new low
cost, no-coding meter. TRUEbalance broadens the Company’s no-code
product portfolio to meet the specific needs of certain segments of the
market. In addition, the TRUEbalance blood glucose monitoring system
allows the Company to further leverage its established manufacturing
infrastructure. The Company anticipates launching TRUEbalance in the
second quarter of 2009.
As outlined previously, the Company continues to be in discussions with
the FDA regarding the risk of inaccurate blood glucose readings in
GDH-PQQ systems for certain groups of patients who are undergoing
maltose based therapies. In late March, the Company provided the FDA
with a plan to further mitigate this risk with its TRUEtest strips,
which utilize this enzyme. The Company has scheduled a meeting in May to
discuss its plan with the FDA.
Joseph Capper, President and Chief Executive Officer of Home Diagnostics
said, “Our first quarter results are slightly better than our guidance.
While we are not satisfied with our current results, we are weathering
the economic downturn substantially better than several of the larger
branded companies in the industry, who reported double digit revenue
declines in the first quarter. We view this as an indicator of the
strength of our value offering, especially given the challenging
economic environment, which we believe is driving patients to lower cost
alternatives. Home Diagnostics is the clear leader in the value segment
of the blood glucose monitoring market, positioning us well to expand
our market share. We are encouraged by the rapid patient adoption of our
new no-coding meters and our capacity expansion is well underway to meet
this growing demand.”
2009 Financial Guidance
For the full year 2009, the Company anticipates total revenue to be in
the range of $130 million to $133 million, representing annual growth of
5% to 8%. The Company anticipates 2009 diluted earnings per share to be
in the range of $0.36 to $0.40. The Company anticipates the majority of
its 2009 revenue and earnings to be weighted towards the second half of
the year due to typical business cycles and the ramp up of new product
launches.
Conference Call
Home Diagnostics will hold a conference call on Thursday, May 7, 2009 at
8:30 a.m. ET to discuss the results. The dial-in numbers are
1-877-407-0789 for domestic callers and 1-201-689-8562 for
international. A live Web cast of the conference call will be available
online from the investor relations page of the Company’s corporate Web
site at www.homediagnostics.com.
After the live Web cast, the call will remain available on Home
Diagnostics’ Web site, www.homediagnostics.com,
through June 7, 2009. In addition, a telephonic replay of the call will
be available until May 14, 2009. The replay dial-in numbers are
1-877-660-6853 for domestic callers and 1-201-612-7415 for international
callers. Please use account number 3055 and conference ID number 321001.
About Home Diagnostics, Inc.
Based in Fort Lauderdale, Florida, Home Diagnostics, Inc. (NASDAQ: HDIX)
is a leading developer, manufacturer and marketer of diabetes management
solutions. Home Diagnostics, Inc. offers a portfolio of high-quality
blood glucose monitoring systems that spans the spectrum of features and
benefits to help every person with diabetes better monitor and manage
their disease. The Home Diagnostics, Inc. product line includes
TRUE2go™, TRUEresult™, TRUEbalance™, TRUEtrack®, Sidekick®, TRUEread™
and Prestige Smart System® blood glucose monitoring systems. The
products are available in more than 45,000 pharmacies throughout the
U.S. Home Diagnostics is the exclusive co-brand supplier of blood
glucose monitoring supplies for leading pharmacies including CVS, Rite
Aid and Walgreens as well as national distributors such as
AmerisourceBergen, Cardinal Health, McKesson and Invacare. Home
Diagnostics, Inc. was named one of Forbes magazine’s “200 Best Small
Companies” in 2008. For more information please visit www.homediagnostics.com.
Forward-Looking Statements
All statements other than statements of historical facts included in
this release that address activities, events or developments that we
expect, believe or anticipate will or may occur in the future are
forward-looking statements.
These forward-looking statements are largely based on our expectations
and beliefs concerning future events, which reflect estimates and
assumptions made by the Company's management. These estimates and
assumptions reflect the Company's best judgment based on currently known
market conditions and other factors relating to the Company's operations
and business environment, all of which are difficult to predict and many
of which are beyond its control.
Although the Company believes its estimates and assumptions to be
reasonable, they are inherently uncertain and involve a number of risks
and uncertainties that are beyond the Company's control. In addition,
management's assumptions about future events may prove to be inaccurate.
Management cautions all readers that the forward-looking statements
contained in this release are not guarantees of future performance, and
the Company cannot assure any reader that those statements will be
realized or the forward-looking events and circumstances will occur.
Actual results may differ materially from those anticipated or implied
in the forward-looking statements due to the factors listed in the "Risk
factors" and "Management's discussion and analysis of financial
condition and results of operations" sections contained in its filings
with the Securities and Exchange Commission. All forward-looking
statements speak only as of the date of this release. The Company does
not intend to publicly update or revise any forward-looking statements
as a result of new information, future events or otherwise, except as
required by law. These cautionary statements qualify all forward-looking
statements attributable to the Company or persons acting on its behalf.
TRUE2go, TRUEresult, TRUEtest, TRUEtrack, Sidekick, TRUEread and
Prestige Smart System are trademarks of Home Diagnostics, Inc. All other
trademarks are property of their respective owners.
|
|
|
|
|
|
|
|
|
|
HOME DIAGNOSTICS, INC. AND SUBSIDIARIES
|
|
Condensed Consolidated Statements of Operations
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2008
|
|
% of Sales
|
|
2009
|
|
% of Sales
|
|
Net sales
|
|
$
|
25,120,280
|
|
|
100.0
|
%
|
|
$
|
24,601,628
|
|
|
100.0
|
%
|
|
Cost of sales
|
|
|
10,531,933
|
|
|
41.9
|
%
|
|
|
13,018,394
|
|
|
52.9
|
%
|
|
Gross profit
|
|
|
14,588,347
|
|
|
58.1
|
%
|
|
|
11,583,234
|
|
|
47.1
|
%
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative (including stock-based
compensation expense of $233,001 and $306,589 for the three months
ended March 31, 2008 and 2009, respectively)
|
|
|
11,870,718
|
|
|
47.3
|
%
|
|
|
12,108,847
|
|
|
49.2
|
%
|
|
Research and development
|
|
|
2,356,848
|
|
|
9.4
|
%
|
|
|
1,883,603
|
|
|
7.7
|
%
|
|
Total operating expenses
|
|
|
14,227,566
|
|
|
56.6
|
%
|
|
|
13,992,450
|
|
|
56.9
|
%
|
|
Income (loss) from operations
|
|
|
360,781
|
|
|
1.4
|
%
|
|
|
(2,409,216
|
)
|
|
-9.8
|
%
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
|
327,868
|
|
|
1.3
|
%
|
|
|
50,148
|
|
|
0.2
|
%
|
|
Other income (expense), net
|
|
|
(526,581
|
)
|
|
-2.1
|
%
|
|
|
119,805
|
|
|
0.5
|
%
|
|
Total other income/(expense)
|
|
|
(198,713
|
)
|
|
-0.8
|
%
|
|
|
169,953
|
|
|
0.7
|
%
|
|
Income (loss) before benefit for income taxes
|
|
|
162,068
|
|
|
0.6
|
%
|
|
|
(2,239,263
|
)
|
|
-9.1
|
%
|
|
Benefit for income taxes
|
|
|
(559,298
|
)
|
|
-2.2
|
%
|
|
|
(540,264
|
)
|
|
-2.2
|
%
|
|
Net income (loss)
|
|
$
|
721,366
|
|
|
2.9
|
%
|
|
$
|
(1,698,999
|
)
|
|
-6.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.04
|
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
Diluted
|
|
$
|
0.04
|
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
Weighted average shares used in computing earnings per common
share:
|
|
|
|
|
|
|
Basic
|
|
|
17,898,772
|
|
|
|
|
|
17,326,013
|
|
|
|
|
Diluted
|
|
|
18,996,852
|
|
|
|
|
|
17,326,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home Diagnostics, Inc.
|
|
Supplemental Information
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Selected Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
30,366,785
|
|
|
$
|
21,543,805
|
|
|
|
|
|
|
|
|
|
|
|
Working capital
|
|
$
|
44,005,456
|
|
|
$
|
36,874,770
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
141,339,701
|
|
|
$
|
136,682,426
|
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
$
|
112,065,961
|
|
|
$
|
107,517,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Provided by (Used In) Operating Activities
|
|
$
|
909,793
|
|
|
$
|
(1,222,445
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash Used in Investing Activities
|
|
$
|
(1,726,361
|
)
|
|
$
|
(4,619,271
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash Provided by (Used in) Financing Activities
|
|
$
|
18,440
|
|
|
$
|
(2,725,208
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Channel:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2008
|
|
2009
|
|
|
Increase/(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
$
|
6,477,918
|
|
|
|
25.8
|
%
|
|
$
|
8,113,560
|
|
33.0
|
%
|
|
|
$
|
1,635,642
|
|
|
25.2
|
%
|
|
Distribution
|
|
|
11,323,297
|
|
|
|
45.1
|
%
|
|
|
9,175,597
|
|
37.3
|
%
|
|
|
|
(2,147,700
|
)
|
|
-19.0
|
%
|
|
Mail Service
|
|
|
4,336,755
|
|
|
|
17.3
|
%
|
|
|
5,283,736
|
|
21.5
|
%
|
|
|
|
946,981
|
|
|
21.8
|
%
|
|
International
|
|
|
2,982,310
|
|
|
|
11.8
|
%
|
|
|
2,028,735
|
|
8.2
|
%
|
|
|
|
(953,575
|
)
|
|
-32.0
|
%
|
|
|
|
$
|
25,120,280
|
|
|
|
100.0
|
%
|
|
$
|
24,601,628
|
|
100.0
|
%
|
|
|
$
|
(518,652
|
)
|
|
-2.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[HDIX-F]
Home Diagnostics
Ronald L. Rubin, Chief Financial
Officer, 954-332-2128
or
Sabrina Rios, Corporate
Communications Manager
954-332-2141
srios@hdidiabetes.com
or
The
Ruth Group
Nick Laudico, 646-536-7030
nlaudico@theruthgroup.com
