Attached files
| file | filename |
|---|---|
| 8-K - ERBA Diagnostics, Inc. | v193990_8k.htm |
Exhibit
99.1
 |
Company
Contact:
Dr.
Charles R. Struby, CEO & President
305-324-2300
Investor
Relations Contact:
Porter,
LeVay & Rose, Inc.
Linda
Decker, Vice President
212-564-4700
|
FOR
IMMEDIATE RELEASE
IVAX
DIAGNOSTICS, INC. REPORTS SECOND QUARTER 2010 FINANCIAL RESULTS
--
Efforts Continue to Position the Company for Growth --
MIAMI, FL, August 16, 2010 --
IVAX Diagnostics, Inc. (NYSE Amex: IVD), a fully integrated in vitro
diagnostics company, reports its financial results for the quarter ended June
30, 2010.
Charles
Struby, Ph.D., Chief Executive Officer and President of IVAX Diagnostics, said,
“Our initiatives to reduce expenses while positioning ourselves for expected
growth continued during the second quarter of the year. Our operating expenses
decreased 11.9% for the second quarter of 2010 compared to the same period of
2009. During the quarter, we entered into two additional distribution agreements
which further expanded our product offerings, both in the U.S. and
internationally, and appointed Arthur R. Levine to serve as our Vice President -
Finance and principal financial and accounting officer. Mr. Levine
was subsequently promoted to the position of Chief Financial Officer. We believe
that Mr. Levine brings a fresh perspective and international expertise to our
critical finance function. His efforts as part of our management team
have already had a positive impact on our financial operations.”
Dr.
Struby continued, “The two distribution agreements we entered into during the
quarter, in addition to the three collaborative agreements we entered into
during the first quarter of 2010, are in furtherance of our strategy to expand
our suite of high-quality, reliable products as well as increase our global
footprint. The first of the two distribution agreements is between
Diamedix Corporation, one of our domestic subsidiaries, and Biomerica, Inc.
(OTCBB: BMRA), a global biomedical company, and grants Diamedix and Delta
Biologicals S.r.l., our European subsidiary, the right to distribute Biomerica’s
suite of products, which includes 33 ELISA (Enzyme-Linked Immunosorbent Assay)
test kits in the areas of diabetes, gastrointestinal disease and bone/mineral
disorders, and more than 26 Rapid Point-of-Care tests. The products distributed
under this agreement will be marketed under the Biomerica brand name, or, if
certain initial sales levels are achieved, under the Diamedix brand name in the
U.S. and the Delta Biologicals brand name internationally. We expect for
this agreement not only to broaden and enhance our ELISA suite of products by
adding Biomerica’s diabetes, gastrointestinal and bone/mineral testing products
to our line of autoimmune test kits, but also to favorably impact our
initiatives to enter into the Rapid Point-of-Care testing market. The second of
the distribution agreements we entered into during the quarter represents an
expansion of an existing distribution arrangement and increases the number of
ELISA test kits and reagents which we have the right to distribute in the U.S.
marketplace.”
Dr.
Struby continued, “Our efforts with respect to our 510(k) premarket submission
filing with the U.S. Food and Drug Administration for the Mago® 4S, our
next-generation fully automated ELISA system for autoimmune and infectious
disease testing, are progressing, and we continue to expect to receive
regulatory approval from the FDA and launch the product during the fourth
quarter of 2010. Following the receipt of all required regulatory approvals and
the subsequent commercial launch of the product, we expect the Mago® 4S will
provide a flexible, efficient and cost-effective solution to high-performance
laboratories, and will be our primary platform for marketing our kits in the
U.S.”
-2-
Dr.
Struby concluded, “While we believe that the initiatives we have implemented are
a positive step towards our goal of transforming our company, we know that our
work is not complete and that there remain challenges to overcome as we position
IVAX Diagnostics for growth. We intend to continue our focus for the remainder
of this year on cost control as we prepare for the Mago® 4S launch and its
expected impact. We look forward to reporting on our efforts and initiatives in
the upcoming months.”
Financial
Highlights for the Quarter and Six Months Ended June 30, 2010
Net
revenues for the quarter ended June 30, 2010 were $4,394,000 compared with
$4,661,000 in the quarter ended June 30, 2009, a decline of $267,000, or
5.7%. The decline in net revenues during the quarter ended June 30,
2010 compared to the same period of 2009 resulted primarily from a decline in
European net revenues, which in turn was principally due to a decline in reagent
sales. Net revenue results for the quarter ended June 30, 2010 were
also negatively impacted by $85,000 as a result of unfavorable exchange rates
attributable to currency fluctuations related to the strength of the U.S. dollar
compared to the Euro. Net revenues for the first six months of 2010 were
$9,049,000, compared with $9,380,000 in the same period of 2009, a decline of
$331,000, or 3.5%. Domestic net revenues were $6,140,000 for the
first six months of 2010, compared with $6,441,000 for the same period of
2009. European net revenues for the first six months of 2010 were
$2,909,000 compared with $2,939,000 for the same period of 2009, with $8,000 of
the decrease resulting from currency fluctuations. As measured in Euros,
revenues from European operations for the quarter ended June 30, 2010 decreased
from 1,117,000 Euros to 987,000 Euros, and for the six months ended June 30,
2010 decreased from 2,203,000 Euros to 2,187,000 Euros, compared to the
corresponding periods in the prior year. Both Domestic and European
revenues benefited from increased sales of instrumentation in the six months
ended June 30, 2010 compared to the same period of 2009, and both Domestic and
European sales were affected by a decline in reagent sales.
Gross
profit in the three months ended June 30, 2010 decreased by $138,000, or 5.6%,
from the comparable period in 2009. Gross profit as a percentage of net revenues
increased slightly to 53.1% in the three months ended June 30, 2010 from 53.0%
in the same period of 2009. Gross profit in the six months ended June 30, 2010
decreased by $423,000, or 8.1%, from the comparable period in 2009. The decrease
in gross profit as a percentage of net revenues to 53.3% in the six months ended
June 30, 2010 from 55.9% in the same period of 2009 was primarily the result of
reduced production volume, as well as the effect of an increase in the
percentage of net revenues attributable to sales of instrumentation, which have
a relatively lower gross profit percentage than reagent sales.
Operating
expenses for the second quarter of 2010 decreased 11.9% to $3,581,000 from
$4,063,000 for the second quarter of 2009. The decrease in operating
expenses was primarily the result of a $379,000, or 23.1%, decrease in selling
expenses and a $124,000, or 6.1%, decrease in general and administrative
expenses. These decreases were partially offset by a $21,000, or 5.3%, increase
in research and development expenses. As a percentage of net revenue, selling
and marketing expenses decreased to 28.7% in the three months ended June 30,
2010 as compared to 35.2% in the three months ended June 30, 2009, principally
due to a temporary decrease in selling and marketing personnel, lower costs and
expenses related to services performed by third party consultants and reduced
sales commissions resulting from a change in the U.S. commission structure and
lower sales. General and administrative expenses decreased during the
second quarter of 2010 principally due to a decline in professional fees from
those incurred during the second quarter of 2009, offset by higher severance
costs in the 2010 period. Total research and development expenses increased due
to costs associated with additional clinical testing that was requested by the
FDA in connection with our 510(k) premarket submission filing for the Mago® 4S.
For the first six months of 2010, operating expenses were $6,949,000 compared
with $7,234,000 in the same period of 2009, a reduction of 3.9%.
-3-
Our loss
from operations for the second quarter of 2010 was $1,246,000 compared with
$1,590,000 in the second quarter of 2009. Net loss for the second
quarter of 2010 was $1,311,000, or $0.05 per share, compared with a net loss of
$1,510,000, or $0.05 per share, in the second quarter of 2009. For the first six months
of 2010, loss from operations was $2,127,000 compared with loss from operations
of $1,989,000 in the same period of 2009.
About
IVAX Diagnostics, Inc.
IVAX
Diagnostics, Inc. (www.ivaxdiagnostics.com),
headquartered in Miami, Florida, is a fully integrated in vitro diagnostics
company that develops, manufactures and distributes in the United States and
internationally, proprietary diagnostic reagents, test kits and instrumentation,
primarily for autoimmune and infectious diseases, through its three
subsidiaries: Diamedix Corporation (U.S.), Delta Biologicals S.r.l. (Europe) and
ImmunoVision, Inc. (U.S.).
Safe
Harbor Statement
Except for the historical matters
contained herein, statements in this press release are forward-looking and are
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that
forward-looking statements involve risks and uncertainties that may affect the
business and prospects of IVAX Diagnostics, Inc., including, without limitation:
the risks and uncertainties associated with the strategic and collaborative
agreements and relationships described in this press release, including, without
limitation, that such agreements and relationships may not result in increased
levels of sales for IVAX Diagnostics, expand IVAX Diagnostics’ global presence,
product offerings or technology platforms in the U.S. or international markets,
further IVAX Diagnostics’ growth, increase IVAX Diagnostics’ footprint in the
global in vitro diagnostics market, improve the manner in which IVAX Diagnostics
operates, improve IVAX Diagnostics’ profitability or otherwise enhance IVAX
Diagnostics’ competitive position in the in vitro diagnostics industry, improve
IVAX Diagnostics’ operating results, financial condition or cash position or
otherwise, individually or in the aggregate, result in the benefits which IVAX
Diagnostics’ expects to derive from such agreements and relationships; the risks
and uncertainties relating to the Mago® 4S, including, without limitation, that
IVAX Diagnostics may not receive regulatory approval for the Mago® 4S when
expected, or at all, that the Mago® 4S may not be available when
expected, or at all, that customers may not integrate the Mago® 4S into their
operations in the quantities or within the timeframes expected and that the
Mago® 4S may not perform as expected or otherwise result in IVAX Diagnostics
achieving improved operating results; the risks and uncertainties relating to
IVAX Diagnostics’ initiatives for transforming the company including, without
limitation, that such initiatives may not result in the successful
transformation of IVAX Diagnostics to the level or in the time frame
anticipated, or at all, that, in order to implement and attempt to achieve such
initiatives, IVAX Diagnostics may find it necessary to obtain financing, whether
from issuing debt or equity securities, incurring indebtedness or otherwise,
which, in any case, may not be available on acceptable terms or at all and that
efforts to control costs, reduce expenses and grow IVAX Diagnostics may not be
successful; and other risks and uncertainties that may cause results to differ
materially from those set forth in the forward-looking statements. In addition to the risks and
uncertainties set forth above, investors should consider the economic,
competitive, governmental, technological and other risks and uncertainties
discussed in IVAX Diagnostics’ filings with the Securities and Exchange
Commission, including, without limitation, the risks and uncertainties discussed
under the heading “Risk Factors” in such filings.
-4-
IVAX
DIAGNOSTICS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
Period
Ended June 30,
|
Three
months
|
Six
months
|
||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
Net revenues
|
$ | 4,394,303 | $ | 4,661,477 | $ | 9,049,324 | $ | 9,380,188 | ||||||||
|
Cost
of sales
|
2,059,308 | 2,188,730 | 4,226,582 | 4,134,248 | ||||||||||||
|
Gross profit
|
2,334,995 | 2,472,747 | 4,822,742 | 5,245,940 | ||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Selling and
marketing
|
1,262,179 | 1,640,849 | 2,557,193 | 2,770,330 | ||||||||||||
|
General and
administrative
|
1,901,226 | 2,025,052 | 3,543,034 | 3,638,441 | ||||||||||||
|
Research and
development
|
417,668 | 396,690 | 849,290 | 825,688 | ||||||||||||
|
Total operating
expenses
|
3,581,073 | 4,062,591 | 6,949,517 | 7,234,459 | ||||||||||||
|
(Loss) from
operations
|
(1,246,078 | ) | (1,589,844 | ) | (2,126,775 | ) | (1,988,519 | ) | ||||||||
|
Other
income:
|
||||||||||||||||
|
Interest income
|
666 | 8,117 | 807 | 12,999 | ||||||||||||
|
Other income (expense),
net
|
(38,527 | ) | 118,804 | (87,065 | ) | 70,301 | ||||||||||
|
Total other income,
net
|
(37,861 | ) | 126,921 | (86,258 | ) | 83,300 | ||||||||||
|
(Loss) before income
taxes
|
(1,283,939 | ) | (1,462,923 | ) | (2,213,033 | ) | (1,905,219 | ) | ||||||||
|
Provision for
income taxes
|
27,351 | 47,281 | 55,685 | 69,684 | ||||||||||||
|
Net
loss
|
$ | (1,311,290 | ) | $ | (1,510,204 | ) | $ | (2,268,718 | ) | $ | (1,974,903 | ) | ||||
|
Net
loss per share
|
||||||||||||||||
|
Basic
and diluted
|
$ | (0.05 | ) | $ | (0.05 | ) | $ | (0.08 | ) | $ | (0.07 | ) | ||||
|
WEIGHTED
AVERAGE NUMBER OF COMMON
|
||||||||||||||||
|
SHARES
OUTSTANDING:
|
||||||||||||||||
|
Basic
|
27,649,887 | 27,649,887 | 27,649,887 | 27,649,887 | ||||||||||||
|
Diluted
|
27,649,887 | 27,649,887 | 27,649,887 | 27,649,887 | ||||||||||||
-more-
-5-
IVAX DIAGNOSTICS, INC.
AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
|
June
30,
|
December
31,
|
|||||||
|
2010
|
2009
|
|||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash and cash
equivalents
|
$ | 2,509,173 | $ | 4,198,913 | ||||
|
Accounts receivable, net of
allowances for doubtful
|
||||||||
|
accounts of $426,804 in 2010 and
$356,162 in 2009
|
5,600,522 | 5,747,466 | ||||||
|
Inventories,
net
|
4,958,089 | 4,808,240 | ||||||
|
Other current
assets
|
259,901 | 302,948 | ||||||
|
Total current
assets
|
13,327,685 | 15,057,567 | ||||||
|
Property,
plant and equipment, net
|
1,800,977 | 1,839,696 | ||||||
|
Equipment
on lease, net
|
622,209 | 851,800 | ||||||
|
Product
license
|
282,936 | 282,936 | ||||||
|
Goodwill
|
870,290 | 870,290 | ||||||
|
Restricted
deposits
|
217,824 | 200,995 | ||||||
|
Other
assets
|
24,726 | 29,110 | ||||||
|
Total assets
|
$ | 17,146,647 | $ | 19,132,394 | ||||
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 1,914,251 | $ | 1,225,572 | ||||
|
Accrued license
payable
|
122,055 | 143,690 | ||||||
|
Accrued expenses and other
current liabilities
|
2,637,617 | 2,695,633 | ||||||
|
Capital lease obligation,
current
|
69,183 | - | ||||||
|
Total current
liabilities
|
4,743,106 | 4,064,895 | ||||||
|
Other
long-term liabilities:
|
||||||||
|
Capital
lease obligation, long-term
|
131,631 | - | ||||||
|
Deferred
tax liabilities
|
333,438 | 301,692 | ||||||
|
Other
long-term liabilities
|
855,507 | 1,040,122 | ||||||
|
Total other long-term
liabilities
|
1,320,576 | 1,341,814 | ||||||
|
Shareholders’
equity:
|
||||||||
|
Common stock, $0.01 par value,
authorized 50,000,000 shares,
|
||||||||
|
issued and
outstanding 27,649,887 in 2010 and 2009
|
276,498 | 276,498 | ||||||
|
Capital in excess of par
value
|
41,389,404 | 41,204,712 | ||||||
|
Accumulated
deficit
|
(29,740,511 | ) | (27,471,793 | ) | ||||
|
Accumulated other comprehensive
loss
|
(842,426 | ) | (283,732 | ) | ||||
|
Total shareholders’
equity
|
11,082,965 | 13,725,685 | ||||||
|
Total liabilities and
shareholders’ equity
|
$ | 17,146,647 | $ | 19,132,394 | ||||
######