SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2003.
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from ___________ to ___________.
Commission File Number 001-16537
ORASURE TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
| DELAWARE (State or Other Jurisdiction of Incorporation or Organization) |
36-4370966 (IRS Employer Identification No.) |
| 220 East First Street, Bethlehem, Pennsylvania (Address of Principal Executive Offices) |
18015 (Zip code) |
(610) 882-1820
(Registrant’s Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).Yes x No o
Number of shares of Common Stock, par value $.000001 per share, outstanding as of May 7, 2003: 38,405,924
|
|
|
|
Page No. |
|
|
|
PART I. FINANCIAL INFORMATION |
|
|
|
|
|
|
| Item 1. |
|
3 | |
|
|
|
|
|
|
|
|
Balance Sheets at March 31, 2003 and December 31, 2002 |
3 |
|
|
|
|
|
|
|
|
Statements of Operations for the three months ended March 31, 2003 and 2002 |
4 |
|
|
|
|
|
|
|
|
Statements of Cash Flows for the three months ended March 31, 2003 and 2002 |
5 |
|
|
|
|
|
|
|
|
6 | |
|
|
|
|
|
| Item 2. |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
9 |
|
|
|
|
|
| Item 3. |
|
15 | |
|
|
|
|
|
| Item 4. |
|
16 | |
|
|
|
|
|
|
|
|
PART II. OTHER INFORMATION |
|
|
|
|
|
|
| Item 6. |
|
17 | |
|
|
|
|
|
| 18 | |||
|
|
|
|
|
| 18 |
2
Item 1.
ORASURE TECHNOLOGIES, INC.
BALANCE SHEETS
(Unaudited)
|
|
|
March 31, 2003 |
|
December 31, 2002 |
| ||
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
|
| CURRENT ASSETS: |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
2,732,080 |
|
$ |
4,364,308 |
|
| Short-term investments |
|
|
12,531,587 |
|
|
10,543,876 |
|
| Accounts receivable, net of allowance for doubtful accounts of $292,831 and $292,146 |
|
|
5,498,599 |
|
|
5,197,787 |
|
| Inventories |
|
|
4,049,098 |
|
|
4,088,474 |
|
| Prepaid expenses and other |
|
|
915,526 |
|
|
925,707 |
|
|
|
|
|
|
|
|
|
|
| Total current assets |
|
|
25,726,890 |
|
|
25,120,152 |
|
| PROPERTY AND EQUIPMENT, net |
|
|
7,321,147 |
|
|
7,427,950 |
|
| PATENTS AND PRODUCT RIGHTS, net |
|
|
2,379,100 |
|
|
2,543,519 |
|
| OTHER ASSETS |
|
|
636,518 |
|
|
645,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
36,063,655 |
|
$ |
35,737,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
| CURRENT LIABILITIES: |
|
|
|
|
|
|
|
| Current portion of long-term debt |
|
$ |
1,098,388 |
|
$ |
1,065,966 |
|
| Accounts payable |
|
|
2,068,168 |
|
|
1,801,952 |
|
| Accrued expenses |
|
|
3,538,621 |
|
|
3,321,509 |
|
|
|
|
|
|
|
|
|
|
| Total current liabilities |
|
|
6,705,177 |
|
|
6,189,427 |
|
|
|
|
|
|
|
|
|
|
| LONG-TERM DEBT |
|
|
3,215,078 |
|
|
3,409,362 |
|
|
|
|
|
|
|
|
|
|
| OTHER LIABILITIES |
|
|
186,411 |
|
|
119,546 |
|
|
|
|
|
|
|
|
|
|
| COMMITMENTS AND CONTINGENCIES |
|||||||
| STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
| Preferred stock, par value $.000001, 25,000,000 shares authorized, none issued |
|
|
— |
|
|
— |
|
| Common stock, par value $.000001, 120,000,000 shares authorized, 38,363,618 and 38,100,557 shares issued and outstanding |
|
|
38 |
|
|
38 |
|
| Additional paid-in capital |
|
|
156,673,278 |
|
|
155,638,314 |
|
| Accumulated other comprehensive loss |
|
|
(188,703 |
) |
|
(184,676 |
) |
| Accumulated deficit |
|
|
(130,527,624 |
) |
|
(129,434,764 |
) |
|
|
|
|
|
|
|
|
|
| Total stockholders’ equity |
|
|
25,956,989 |
|
|
26,018,912 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
36,063,655 |
|
$ |
35,737,247 |
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these statements.
3
ORASURE TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
Three Months Ended March 31, |
| ||||
|
|
|
|
| ||||
|
|
|
2003 |
|
2002 |
| ||
|
|
|
|
|
|
| ||
| REVENUES: |
|
|
|
|
|
|
|
| Product |
|
$ |
8,342,964 |
|
$ |
7,468,621 |
|
| Licensing and product development |
|
|
267,672 |
|
|
256,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,610,636 |
|
|
7,725,474 |
|
| COST OF PRODUCTS SOLD |
|
|
3,580,116 |
|
|
2,894,230 |
|
|
|
|
|
|
|
|
|
|
| Gross profit |
|
|
5,030,520 |
|
|
4,831,244 |
|
|
|
|
|
|
|
|
|
|
| OPERATING EXPENSES: |
|
|
|
|
|
|
|
| Research and development |
|
|
2,054,711 |
|
|
2,420,263 |
|
| Sales and marketing |
|
|
2,235,137 |
|
|
1,988,181 |
|
| General and administrative |
|
|
1,865,621 |
|
|
2,084,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,155,469 |
|
|
6,492,745 |
|
|
|
|
|
|
|
|
|
|
| Operating loss |
|
|
(1,124,949 |
) |
|
(1,661,501 |
) |
| INTEREST EXPENSE |
|
|
(48,605 |
) |
|
(84,249 |
) |
| INTEREST INCOME |
|
|
85,573 |
|
|
153,235 |
|
| FOREIGN CURRENCY LOSS |
|
|
— |
|
|
(182 |
) |
|
|
|
|
|
|
|
|
|
| Loss before income taxes |
|
|
(1,087,981 |
) |
|
(1,592,697 |
) |
| INCOME TAXES |
|
|
4,879 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
| NET LOSS |
|
$ |
(1,092,860 |
) |
$ |
(1,592,697 |
) |
|
|
|
|
|
|
|
|
|
| BASIC AND DILUTED NET LOSS PER SHARE |
|
$ |
(0.03 |
) |
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
|
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING |
|
|
38,248,521 |
|
|
37,434,075 |
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these statements.
4
ORASURE TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Three Months Ended March 31, |
| ||||
|
|
|
|
| ||||
|
|
|
2003 |
|
2002 |
| ||
|
|
|
|
|
|
| ||
| OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
| Net loss |
|
$ |
(1,092,860 |
) |
$ |
(1,592,697 |
) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
| Stock-based compensation expense |
|
|
33,900 |
|
|
— |
|
| Amortization of deferred revenue |
|
|
— |
|
|
(53,750 |
) |
| Depreciation and amortization |
|
|
626,847 |
|
|
542,626 |
|
| Loss on disposition of assets |
|
|
— |
|
|
2,137 |
|
| Provision for excess and obsolete inventories |
|
|
111,284 |
|
|
104,817 |
|
| Changes in assets and liabilities: |
|
|
|
|
|
|
|
| Accounts receivable |
|
|
(300,812 |
) |
|
318,983 |
|
| Inventories |
|
|
(71,908 |
) |
|
(543,986 |
) |
| Prepaid expenses and other assets |
|
|
10,181 |
|
|
25,151 |
|
| Accounts payable and accrued expenses |
|
|
855,274 |
|
|
(877,415 |
) |
|
|
|
|
|
|
|
|
|
| Net cash provided by (used in) operating activities |
|
|
171,906 |
|
|
(2,074,134 |
) |
|
|
|
|
|
|
|
|
|
| INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
| Purchases of short-term investments |
|
|
(6,790,725 |
) |
|
(1,989,774 |
) |
| Proceeds from the sale of short-term investments |
|
|
4,803,559 |
|
|
3,269,044 |
|
| Purchases of property and equipment |
|
|
(411,798 |
) |
|
(396,773 |
) |
| Proceeds from the sale of property and equipment |
|
|
— |
|
|
2,393 |
|
| Purchases of patents and product rights |
|
|
(250,000 |
) |
|
— |
|
| Increase in other assets |
|
|
(1,287 |
) |
|
(8,949 |
) |
|
|
|
|
|
|
|
|
|
| Net cash provided by (used in) investing activities |
|
|
(2,650,251 |
) |
|
875,941 |
|
|
|
|
|
|
|
|
|
|
| FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
| Borrowings of term debt |
|
|
108,683 |
|
|
— |
|
| Repayments of term debt |
|
|
(270,545 |
) |
|
(296,199 |
) |
| Proceeds from issuance of common stock |
|
|
1,001,064 |
|
|
108,372 |
|
|
|
|
|
|
|
|
|
|
| Net cash provided by (used in) financing activities |
|
|
839,202 |
|
|
(187,827 |
) |
|
|
|
|
|
|
|
|
|
| EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH |
|
|
6,915 |
|
|
(12,024 |
) |
|
|
|
|
|
|
|
|
|
| NET DECREASE IN CASH AND CASH EQUIVALENTS |
|
|
(1,632,228 |
) |
|
(1,398,044 |
) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
|
4,364,308 |
|
|
2,426,346 |
|
|
|
|
|
|
|
|
|
|
| CASH AND CASH EQUIVALENTS, END OF PERIOD |
|
$ |
2,732,080 |
|
$ |
1,028,302 |
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these statements.
5
Notes to Financial Statements (Unaudited)
1.
The Company
We develop, manufacture and market oral specimen collection devices using our proprietary oral fluid technologies, diagnostic products including in vitro diagnostic tests, and other medical devices. These products are sold in the United States and certain foreign countries to various distributors, government agencies, clinical laboratories, physicians’ offices, hospitals, and commercial and industrial entities.