(Source: PrimeNewswire)
BETHLEHEM, Pa., Aug. 5, 2009 (GLOBE NEWSWIRE) -- OraSure Technologies, Inc. (Nasdaq:OSUR), a market leader in oral fluid diagnostics, today announced revenues of $17.3 million for the three months ended June 30, 2009, compared to $18.9 million recorded for the three months ended June 30, 2008. The Company also announced the resolution of the previously disclosed manufacturing issue related to its OraQuick(r) rapid HIV-1/2 antibody test and the resumption of full-scale production of that product.
The decrease in revenue for the second quarter was primarily caused by lower sales of infectious disease products as a direct result of a manufacturing issue related to the Company's OraQuick(r) test. Due to difficulty experienced in manufacturing a component of the Company's OraQuick(r) test during the second quarter of 2009, the Company was unable to manufacture sufficient quantities of the test needed to meet full customer demand. As a result, inventory levels were reduced and the Company had a $2.2 million back log of orders for its OraQuick (r) HIV-1/2 test as of June 30, 2009 that under normal circumstances would have shipped in the second quarter. The Company recently identified the root cause for the manufacturing issue and implemented corrective action, allowing it to resume full-scale manufacturing of OraQuick(r).
"Our infectious disease business performed well during the second quarter, and we expect that to continue now that we have resolved the recent manufacturing issue experienced with our OraQuick(r) test," said Douglas A. Michels, President and CEO of OraSure Technologies. "The issue was detected during routine in-process quality control testing. A root cause was identified and corrective action was implemented, allowing us to resume full-scale production. Had we not experienced this manufacturing challenge, we believe our revenues for the quarter would have exceeded our previously announced guidance."
The Company recorded a net loss of $5.2 million, or $0.11 per share, for the second quarter of 2009, compared to a net loss of $2.2 million, or $0.05 per share for the second quarter of 2008, on a GAAP[1] basis. Operating results for the second quarter 2009 included a $3.0 million pre-tax impairment charge related to the net book value of payments previously capitalized under a Hepatitis C ("HCV") patent license agreement. On a non-GAAP basis, the Company would have reported a $2.1 million pre-tax loss during the second quarter of 2009, excluding the impairment charge, compared to a pre-tax loss for the second quarter of 2008 of $3.1 million.
During the fourth quarter of 2008, the Company established a full valuation allowance against its net deferred tax asset. As a result, the Company will not record Federal income tax expense or benefit in 2009. The Company recorded an income tax benefit of $821,000 for the three months ended June 30, 2008.
For the six months ended June 30, 2009, the Company recorded revenues of $34.5 million, a decrease of 7% when compared to revenues of $37.0 million for the six months ended June 30, 2008. The Company recorded a net loss of $6.8 million, or $0.15 per share, for the six months ended June 30, 2009, compared to a net loss of $242,000, or $0.01 per share, for the six months ended June 30, 2008, on a GAAP basis. Results for the first six months of 2009 included the $3.0 million pre-tax impairment charge described above and results for the first six months of 2008 included a $4.9 million pre-tax gain related to a lump sum payment received under a settlement and licensing agreement entered into during that period. Excluding these items, the Company would have reported, on a non-GAAP basis, a $3.8 million pre-tax loss for the first six months of 2009 compared to $5.2 million pre-tax loss for the first six months of 2008.
Gross margin in the second quarter of 2009 was 57% compared to 59% in the second quarter of 2008. Gross margin was favorably impacted in the current quarter by the Company's switch in January 2009 to a direct sales model for the OraQuick ADVANCE(r) HIV-1/2 test in the U.S. hospital market. However, this favorable impact was more than offset by a less favorable revenue mix and increased product support costs as the Company worked to resolve the manufacturing issue related to its OraQuick(r) HIV-1/2 test during the current quarter.
Operating expenses for the second quarter of 2009 increased to $15.2 million, from $15.0 million in the comparable period in 2008. This increase was primarily attributable to the $3.0 million pre-tax impairment charge described above offset by a $3.7 million decrease in research and development costs associated with the Company's OraQuick(r) HCV and OraQuick(r) HIV OTC clinical development programs. Operating expenses for the six months ended June 30, 2009 were $28.0 million, compared to $28.6 million for the comparable period in 2008. A $4.9 million decrease in research and development costs in the first six months of 2009 was offset by the $3.0 million pre-tax impairment charge and a $1.2 million increase in general and administrative expenses resulting primarily from higher legal fees related to pending patent infringement litigation.
Cash, cash equivalents and short-term investments totaled $79.2 million and working capital was $89.3 million at June 30, 2009, compared to $82.5 million and $90.9 million, respectively, at December 31, 2008.
Third Quarter 2009 Outlook
The Company expects total revenues for the third quarter of 2009 to range from approximately $19.0 to $19.5 million. The Company is currently projecting a loss per share for the third quarter of 2009 of approximately $0.05 to $0.06.
