Q1 GAAP EPS of
Restructuring initiatives expected to result in
Delivered initial orders for Syphilis Health Check™ as part of our distribution agreement with Diagnostics Direct
“Our Q1 results were consistent with our expectations, and our transformation continues with three recent important initiatives to further streamline the business and focus on our strengths. We are winding down our microbiome laboratory and analytical sequencing services business, insourcing third-party manufacturing activities into our
She continued, “Over the last 18 months, we have strengthened the foundation of our organization, and we are excited to help power the potential of precision health. Our stronger balance sheet provides us the flexibility to invest in our innovation roadmap, including current partnerships and inorganic opportunities that leverage our existing capabilities, and positions
Financial Highlights
Three Months Ended | ||||||||||
2024 | 2023 | % Change | ||||||||
Core Business 1 | $ | 31,004 | $ | 36,554 | (15 | )% | ||||
COVID-19 | 23,128 | 118,409 | (80 | ) | ||||||
Total Net Revenue | $ | 54,132 | $ | 154,963 | (65 | )% |
(1) Includes diagnostics, molecular products and services, other products and services revenue, and non-product and services revenue.
Three Months Ended | ||||||||||
2024 | 2023 | % Change | ||||||||
Net revenues | $ | 54,132 | $ | 154,963 | (65 | )% | ||||
Gross profit | 24,065 | 65,815 | (63 | ) | ||||||
Gross margin | 44.5 | % | 42.5 | % | ||||||
Non-GAAP gross profit | 24,447 | 66,277 | (63 | ) | ||||||
Non-GAAP gross margin | 45.2 | % | 42.8 | % | ||||||
Operating income (loss) | (7,093 | ) | 24,321 | NM | ||||||
Operating margin | (13.1 | )% | 15.7 | % | ||||||
Non-GAAP operating income (loss) | (325 | ) | 32,658 | NM | ||||||
Non-GAAP operating margin | (0.6 | )% | 21.1 | % | ||||||
Net income (loss) | (3,584 | ) | 27,219 | NM | ||||||
Non-GAAP net income (loss) | 3,086 | 34,556 | (91 | ) | ||||||
GAAP EPS | $ | (0.05 | ) | $ | 0.37 | NM | ||||
Non-GAAP EPS | $ | 0.04 | $ | 0.47 | (91 | ) |
NM – not meaningful
- Total net revenues for the first quarter of 2024 decreased 65% to
$54.1 million from$155 .0 million in the first quarter of 2023. - Core revenue (all revenue excluding COVID-19 revenue) of
$31.0 million in the first quarter decreased 15% year-over-year. Diagnostics revenue in the first quarter decreased 4% year-over-year and Molecular Sample Management Solutions revenue decreased 16%. - COVID-19 revenue of
$23 .1 million in the first quarter decreased 80% year-over-year, which was in line with our expectations as volumes under our government contracts taper down. - GAAP gross margin percentage was 44.5% in the first quarter of 2024 compared to 42.5% in the first quarter of 2023. Non-GAAP gross margin in the first quarter of 2024 was 45.2% compared to 42.8% in the first quarter of 20231. On a year-over-year basis, gross margin benefited from increased average selling price on InteliSwab® and lower manufacturing scrap expense.
- GAAP operating loss in the first quarter of 2024 was
$7.1 million compared to operating income of$24.3 million in the first quarter of 2023. Non-GAAP operating loss was$0 .3 million in the first quarter of 2024 compared to Non-GAAP operating income of$32 .7 million in the first quarter of 2023. - Cash, cash equivalents, and short-term investments were
$263 .8 million as ofMarch 31, 2024 . The$26 .6 million decrease in our cash balance during the first quarter of 2024 was primarily driven by our$28.3 million investment in Sapphiros, a next-generation consumer diagnostics company, which we announced in January. Cash Flow from Operations in the first quarter of 2024 was$6.7 million .
Recent Business Developments
- During the second quarter, we initiated steps to wind down and exit our microbiome laboratory and analytical sequencing services business (Diversigen) by the end of Q3 2024. This action is expected to result in more than
$10 million of annualized cost savings upon completion. Diversigen generated$4 million of revenue over the last 12 months.OraSure will continue to produce and sell microbiome collection kits as part of our Sample Management Solutions. - Commenced projects to insource production of certain sample management products from external contract manufacturers into our manufacturing
Center of Excellence inBethlehem, PA over the next 18 months. Upon completion, this transition is expected to result in$5 million of annualized cost savings through improved operating efficiency and further leveraging of our existing infrastructure. - Initiated steps to close our
Novosanis site inBelgium by the end of 2024 in order to drive further integration into our existing infrastructure.OraSure will continue to develop and sell the Colli-Pee® urine collection device as part of our Sample Management Solutions. - Successfully launched our sales and distribution partnerships with Diagnostics Direct and Anaerobe Systems, among others, which allow us to enter new market segments and expand the portfolio of products we can provide to our customers.
- Remain on track to achieve operating cash flow break-even for the core business by the end of 2024.
- Published our 2023-2024 “OraSure Cares” ESG report, which highlights our progress in advancing Environmental, Social, and Governance-related initiatives that are meaningful to our internal and external stakeholders.
Financial Guidance
The Company is guiding to Q2 2024 revenue of
_______________
1 For additional information on non-GAAP financial measures and a reconciliation of the GAAP financial results to non-GAAP financial results, see the schedules below. A description of the adjustments made to the GAAP financial measures is included at the end of the schedules.
Financial Data (Unaudited)
Three Months Ended | |||||||
2024 | 2023 | ||||||
Results of Operations | |||||||
Net revenues | $ | 54,132 | $ | 154,963 | |||
Cost of products and services sold | 30,067 | 89,148 | |||||
Gross profit | 24,065 | 65,815 | |||||
Operating expenses: | |||||||
Research and development | 7,738 | 10,560 | |||||
Sales and marketing | 8,448 | 12,142 | |||||
General and administrative | 11,634 | 17,711 | |||||
Loss on impairment | 3,338 | 1,105 | |||||
Change in fair value of acquisition-related contingent consideration | — | (24 | ) | ||||
Total operating expenses | 31,158 | 41,494 | |||||
Operating income (loss) | (7,093 | ) | 24,321 | ||||
Other income | 3,491 | 2,673 | |||||
Income (loss) before income taxes | (3,602 | ) | 26,994 | ||||
Income tax benefit | (18 | ) | (225 | ) | |||
Net income (loss) | $ | (3,584 | ) | $ | 27,219 | ||
Earnings (loss) per share: | |||||||
Basic | $ | (0.05 | ) | $ | 0.37 | ||
Diluted | $ | (0.05 | ) | $ | 0.37 | ||
Weighted average shares: | |||||||
Basic | 73,947 | 73,112 | |||||
Diluted | 73,947 | 73,966 |
Three Months Ended | ||||||||
2024 | 2023 | % Change | ||||||
$ | 23,097 | $ | 118,254 | (80) | % | |||
Diagnostics | 16,380 | 17,090 | (4 | ) | ||||
Molecular Sample Management Solutions | 10,822 | 12,942 | (16 | ) | ||||
Other products and services | 2,576 | 3,094 | (17 | ) | ||||
Molecular Services | 873 | 1,379 | (37 | ) | ||||
COVID-19 Molecular Products | 31 | 155 | (80 | ) | ||||
Net product and services revenues | 53,779 | 152,914 | (65 | ) | ||||
Non-product and services revenues | 353 | 2,049 | (83 | ) | ||||
Net revenues | $ | 54,132 | $ | 154,963 | (65) | % | ||
Condensed Consolidated Balance Sheets (Unaudited)
Assets | |||||
Cash and cash equivalents | $ | 247,145 | $ | 290,407 | |
Short-term investments | 16,627 | — | |||
Accounts receivable, net | 34,037 | 40,171 | |||
Inventories | 43,180 | 47,614 | |||
Other current assets | 7,516 | 8,267 | |||
Property, plant and equipment, net | 42,597 | 45,420 | |||
Intangible assets, net | 1,010 | 1,206 | |||
35,172 | 35,696 | ||||
Investment in equity method investee | 28,333 | — | |||
Other noncurrent assets | 11,941 | 14,064 | |||
Total assets | $ | 467,558 | $ | 482,845 | |
Liabilities and Stockholders’ Equity | |||||
Accounts payable | $ | 12,683 | $ | 13,151 | |
Deferred revenue | 1,597 | 1,559 | |||
Other current liabilities | 14,825 | 24,826 | |||
Other non-current liabilities | 12,202 | 12,638 | |||
Stockholders’ equity | 426,251 | 430,671 | |||
Total liabilities and stockholders’ equity | $ | 467,558 | $ | 482,845 | |
Additional Financial Data (Unaudited)
Three Months Ended | |||||
2024 | 2023 | ||||
Capital expenditures | $ | 1,579 | $ | 3,958 | |
Depreciation and amortization | $ | 2,725 | $ | 3,696 | |
Stock-based compensation | $ | 2,968 | $ | 2,655 | |
Cash provided by operating activities | $ | 6,738 | $ | 6,002 | |
Consolidated Statement of Cash Flows (Unaudited)
Three Months Ended | |||||||
2024 | 2023 | ||||||
OPERATING ACTIVITIES: | |||||||
Net income (loss) | $ | (3,584 | ) | $ | 27,219 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Stock-based compensation | 2,968 | 2,655 | |||||
Depreciation and amortization | 2,725 | 3,696 | |||||
Loss on impairments | 3,338 | 1,105 | |||||
Other non-cash amortization | 6 | — | |||||
Provision for credit losses | (85 | ) | (67 | ) | |||
Unrealized foreign currency (gain) loss | (119 | ) | 44 | ||||
Interest expense on finance leases | 7 | 15 | |||||
Deferred income taxes | 53 | — | |||||
Change in the estimated fair value of acquisition-related contingent consideration | — | (24 | ) | ||||
Payment of acquisition-related contingent consideration | — | (19 | ) | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 6,199 | (36,613 | ) | ||||
Inventories | 4,337 | 18,540 | |||||
Prepaid expenses and other assets | 603 | 5,299 | |||||
Accounts payable | (68 | ) | (12,097 | ) | |||
Deferred revenue | 47 | (279 | ) | ||||
Accrued expenses and other liabilities | (9,688 | ) | (3,472 | ) | |||
Net cash provided by operating activities | 6,738 | 6,002 | |||||
INVESTING ACTIVITIES: | |||||||
Purchases of short-term investments | (25,850 | ) | (22,330 | ) | |||
Purchase of equity method investee | (28,333 | ) | — | ||||
Proceeds from maturities and redemptions of short-term investments | 9,234 | 27,304 | |||||
Purchases of property and equipment | (1,579 | ) | (1,191 | ) | |||
Purchase of property and equipment under government contracts | — | (2,767 | ) | ||||
Net cash provided by (used in) investing activities | (46,528 | ) | 1,016 | ||||
FINANCING ACTIVITIES: | |||||||
Cash payments for lease liabilities | (50 | ) | (148 | ) | |||
Proceeds from exercise of stock options | 215 | 66 | |||||
Payment of acquisition-related contingent consideration | — | (46 | ) | ||||
Repurchase of common stock | (1,462 | ) | (1,203 | ) | |||
Net cash used in financing activities | (1,297 | ) | (1,331 | ) | |||
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH | (2,175 | ) | 527 | ||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (43,262 | ) | 6,214 | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 290,407 | 83,980 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 247,145 | $ | 90,194 | |||
Conference Call
The Company will host a conference call and audio webcast to discuss the Company’s first quarter 2024 results and certain business developments, beginning today at
A webcast of the conference call will be available on the investor relations page of OraSure’s website at https://orasure.gcs-web.com/events-and-presentations. Please click on the webcast link and follow the prompts for registration and access at least 10 minutes prior to the call. The webcast will be archived on OraSure’s website shortly after the call has ended and will be available for approximately 90 days. If a participant will be listen-only, they are encouraged to listen via the webcast.
To participate in the live conference call, please follow the link below to pre-register. After registering, you will be provided with your access details via email. It is recommended to dial in at least 15 minutes prior to the call start time.
https://register.vevent.com/register/BI6ea5c5c7630d4ba196be212024e8c2e6
About
About InteliSwab®
This product has not been FDA cleared or approved, but it has been authorized by the FDA under an EUA. The emergency use of this product has been authorized only for the detection of proteins from SARS-CoV-2, not for any other viruses or pathogens. This product is only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 under Section 564(b)(1) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 360bbb- 3(b)(1), unless the declaration is terminated or authorization is revoked sooner.
Development of the InteliSwab® COVID-19 Rapid Test has been funded in whole or in part with federal funds from the
Forward Looking Statements
This press release contains certain forward-looking statements, including with respect to products, product development and manufacturing activities, regulatory submissions and authorizations, revenue growth and guidance, expected revenue from government orders, cost savings, cash flow, increasing margins and other matters. Forward-looking statements are not guarantees of future performance or results. Known and unknown factors that could cause actual performance or results to be materially different from those expressed or implied in these statements include, but are not limited to: our ability to satisfy customer demand; ability to reduce our spending rate, capitalize on manufacturing efficiencies and drive profitable growth; ability to achieve the anticipated cost savings as a result of our business restructuring, including from insourcing third party manufacturing and exiting microbiome services; ability to market and sell products, whether through our internal, direct sales force or third parties; impact of significant customer concentration in the genomics business; failure of distributors or other customers to meet purchase forecasts, historic purchase levels or minimum purchase requirements for our products; ability to manufacture or have manufactured products in accordance with applicable specifications, performance standards and quality requirements; ability to obtain, and timing and cost of obtaining, necessary regulatory approvals for new products or new indications or applications for existing products; ability to comply with applicable regulatory requirements; ability to effectively resolve warning letters, audit observations and other findings or comments from the FDA or other regulators; the impact of the novel coronavirus (“COVID-19”) pandemic on the Company's business, supply chain, labor force, ability to successfully develop new products, validate the expanded use of existing collector products, receive necessary regulatory approvals and authorizations and commercialize such products for COVID-19 testing, and demand for our COVID-19 testing products ; changes in relationships, including disputes or disagreements, with strategic partners or other parties and reliance on strategic partners for the performance of critical activities under collaborative arrangements; ability to meet increased demand for the Company’s products; impact of replacing distributors; inventory levels at distributors and other customers; ability of the Company to achieve its financial and strategic objectives and continue to increase its revenues, including the ability to expand international sales and the ability to continue to reduce costs; impact of competitors, competing products and technology changes; reduction or deferral of public funding available to customers; competition from new or better technology or lower cost products; ability to develop, commercialize and market new products; market acceptance of oral fluid or urine testing, collection or other products; market acceptance and uptake of microbiome informatics, microbial genetics technology and related analytics services; changes in market acceptance of products based on product performance or other factors, including changes in testing guidelines, algorithms or other recommendations by the
Statement Regarding Use of Non-GAAP Financial Measures
In this press release, the Company’s financial results and financial guidance are provided in accordance with accounting principles generally accepted in
The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Non-GAAP financial results are reported in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Further, non-GAAP financial measures, even if similarly titled, may not be calculated in the same manner by all companies, and therefore should not be compared.
OraSure Technologies GAAP to Non-GAAP Reconciliation ($ in 000's)
Three Months Ended | |||||||
2024 | 2023 | ||||||
Revenue | $ | 54,132 | $ | 154,963 | |||
GAAP Cost of products and services sold | 30,067 | 89,148 | |||||
GAAP Gross Margin | 44.5 | % | 42.5 | % | |||
Stock compensation | 151 | 134 | |||||
Amortization of acquisition-related intangible assets | — | 132 | |||||
Reduction in workforce severance | 231 | 35 | |||||
Transformation related expenses | — | 161 | |||||
Non-GAAP Cost of Goods Sold | 29,685 | 88,686 | |||||
Non-GAAP Gross Margin | 45.2 | % | 42.8 | % | |||
GAAP Operating Income (Loss) | (7,093 | ) | 24,321 | ||||
Stock compensation | 2,967 | 2,655 | |||||
Amortization of acquisition-related intangible assets | 59 | 466 | |||||
Reduction in workforce severance | 404 | 2,635 | |||||
Loss on impairment | 3,338 | 1,105 | |||||
Transformation related expenses | — | 449 | |||||
Government grant accounting | — | 1,051 | |||||
Change in fair value of acquisition-related contingent consideration | — | (24 | ) | ||||
Non-GAAP Operating Income (Loss) | (325 | ) | 32,658 | ||||
GAAP Net Income (Loss) | (3,584 | ) | 27,219 | ||||
Stock compensation | 2,967 | 2,655 | |||||
Amortization of acquisition-related intangible assets | 59 | 466 | |||||
Reduction in workforce severance | 404 | 2,635.00 | |||||
Loss on impairment | 3,338 | 1,105 | |||||
Transformation related expenses | — | 449 | |||||
Change in fair value of acquisition-related contingent consideration | — | (24 | ) | ||||
Tax effect of Non-GAAP adjustments | (98 | ) | 51 | ||||
Non-GAAP Net Income | $ | 3,086 | $ | 34,556 | |||
GAAP Earnings (Loss) Per Share: | $ | (0.05 | ) | $ | 0.37 | ||
Non-GAAP Earnings Per Share: | $ | 0.04 | $ | 0.47 | |||
Diluted Shares Outstanding | 73,947 | 73,966 | |||||
Diluted Shares Outstanding Used For Computing Non-GAAP Earnings (Loss) Per Share | 75,628 | 73,966 | |||||
Following is a description of the adjustments made to GAAP financial measures:
- Stock Compensation: non-cash equity-based compensation provided to
OraSure employees and directors - Amortization of acquisition-related intangible assets: represents recurring amortization charges resulting from the acquisition of intangible assets associated with our business combinations
- Reduction in workforce severance: one-time termination benefits associated with the Company’s workforce reduction
- Loss on impairment: charges related to the write down of Company’s PP&E and leased assets
- Transformation related expenses: transitory costs such as consulting and professional fees related to transformation initiatives
- Government contract accounting: As required under International Accounting Standard Board IAS 20, Accounting for Government Contracts and Disclosure of Government Assistance, our operating expenses associated with the
Department of Defense expansion contract are reflected in operating expenses with offsetting reimbursement reflected in other income - Change in fair value of acquisition-related contingent consideration: changes in the fair value of contingent consideration liability associated with estimate changes in reaching contingent consideration metrics
- Tax impact associated with non-GAAP adjustments – tax expense/(benefit) due to non-GAAP adjustments
A reconciliation of our non-GAAP measures to their most directly comparable GAAP measures can also be found at: https://orasure.gcs-web.com/gaap-non-gaap-reconciliation
Investor Contact: | Media Contact: |
VP, Investor Relations | Director, Corporate Communications |
investorinfo@orasure.com | media@orasure.com |
Source:
2024 GlobeNewswire, Inc., source