InteliSwab® test revenue of $47.5 million in Q2
Q2 Core revenue of $37.9 million grew 4% sequentially and 3% year-over-year
Q2 GAAP EPS of $(0.07); Q2 Non-GAAP EPS of $0.09
Grew cash balance to $185.9 million as of June 30, 2023
InteliSwab® orders are expected to generate at least $70 million of revenue in second half of 2023
On track to achieve operating cash flow breakeven on core business by end of 2024
BETHLEHEM, Pa., Aug. 03, 2023 (GLOBE NEWSWIRE) -- OraSure Technologies, Inc. ( OSUR), a leader in point-of-care and home diagnostic tests, specimen collection devices, and microbiome laboratory and analytical services, today announced its financial results for the three months ended June 30, 2023.
“This quarter we continued to deliver clear progress on our transformation journey. Our disciplined execution on our priorities, including InteliSwab® contracts and enterprise-wide operating efficiencies, allowed us to generate positive operating cash flow and build our cash balance to $186 million as of June 30, 2023. We expect to drive additional productivity enhancements across our organization as part of our multi-year commitment to strengthen our foundation, such as facility consolidation, further leveraging automation, and controlling our non-production costs. As a result, we continue to believe we will achieve our target of breakeven in cash flow from operations for the core business by the end of 2024,” said OraSure President and CEO Carrie Eglinton Manner.
She continued, “We demonstrated solid progress in the second quarter with core revenue growth on both a sequential and a year-over-year basis. We are also investing to support and enhance our leadership position and elevate our growth in our key portfolios. Additionally, we gained visibility to InteliSwab® order trends for the second half of this year. Overall, we believe that the progress we are making positions the Company to further drive profitable growth and deliver shareholder value.”
Financial Highlights
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||
| Core Business | $ | 37,934 | $ | 36,853 | 3% | $ | 74,488 | $ | 73,527 | 1% | |||||
| COVID-19 | 47,507 | 43,378 | 10 | 165,916 | 74,411 | 123 | |||||||||
| Total Net Revenue | $ | 85,441 | $ | 80,231 | 6% | $ | 240,404 | $ | 147,938 | 63% | |||||
| Three Months Ended June 30, | Six months ended June 30, | ||||||||||||||||||||
| 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||||
| Net revenues | $ | 85,441 | $ | 80,231 | 6 | % | $ | 240,404 | $ | 147,938 | 63 | % | |||||||||
| Gross profit | 26,371 | 27,797 | (5 | ) | 92,186 | 52,096 | 77 | ||||||||||||||
| Gross margin | 30.9 | % | 34.6 | % | 38.3 | % | 35.2 | % | |||||||||||||
| Non-GAAP gross profit | 35,866 | 32,422 | 11 | 95,193 | 57,949 | 64 | |||||||||||||||
| Non-GAAP gross margin | 42.0 | % | 40.4 | % | 39.6 | % | 39.2 | % | |||||||||||||
| Operating income (loss) | (6,429 | ) | (21,471 | ) | 70 | 17,892 | (37,643 | ) | NM | ||||||||||||
| Operating margin | (7.5 | )% | (26.8 | )% | 7.4 | % | (25.4 | )% | |||||||||||||
| Non-GAAP operating income (loss) | 6,726 | (1,162 | ) | NM | 32,434 | (5,451 | ) | NM | |||||||||||||
| Non-GAAP operating margin | 7.9 | % | (1.4 | )% | 13.5 | % | (3.7 | )% | |||||||||||||
| Net income (loss) | (4,796 | ) | (18,589 | ) | 74 | 22,423 | (38,529 | ) | NM | ||||||||||||
| Non-GAAP net income (loss) | 6,604 | $ | 169 | NM | 34,209 | (10,493 | ) | NM | |||||||||||||
| GAAP EPS | $ | (0.07 | ) | $ | (0.26 | ) | 74 | $ | 0.30 | $ | (0.53 | ) | NM | ||||||||
| Non-GAAP EPS | $ | 0.09 | $ | 0.00 | NM | $ | 0.46 | $ | (0.15 | ) | NM | ||||||||||
NM – not meaningful
- Net revenues for the second quarter of 2023 were $85.4 million, a 6% increase from the second quarter of 2022.
- InteliSwab® test revenue of $47.5 million in the second quarter grew 10% year-over-year but decreased 60% sequentially as test volumes declined from the record levels experienced in the prior quarter.
- Core revenue (excluding COVID-19 revenues) of $37.9 million in the second quarter grew 4% sequentially and 3% year-over-year. Core revenue growth was driven by strong HIV sales in the U.S. and international markets. Molecular product revenue in the quarter increased 1% sequentially but declined on a year-over-year basis, which was in line with our expectations.
- GAAP gross margin percentage was 30.9% in the second quarter of 2023 compared to 34.6% in the second quarter of 2022 and compared to 42.5% in the first quarter of 2023. GAAP gross margin in the second quarter of 2023 includes $7 million of accelerated depreciation expense related to the wind-down of manufacturing operations in Thailand. Non-GAAP gross margins in the second quarter of 2023 were 42.0% compared to 40.4% in the second quarter of 2022 and compared to 42.8% in the first quarter of 20231. Excluding the impact of the accelerated depreciation and other non-GAAP adjustments, on a year-over-year basis, gross margins benefited from certain cost reductions, including a reduction in headcount, InteliSwab® packaging redesign, and lower freight costs.
- GAAP operating loss in the second quarter of 2023 was $6.4 million which compares to a $21.5 million operating loss in the second quarter of 2022. Non-GAAP operating income was $6.7 million in the second quarter of 2023 compared to a $1.2 million non-GAAP operating loss in the second quarter of 2022.
- Cash and cash equivalents increased to $185.9 million as of June 30, 2023. The $73.5 million increase in our cash balance during the second quarter of 2023 was primarily driven by strong collections of accounts receivable. We also received $17.8 million from the U.S. government related to our manufacturing expansion contract.
Recent Business Highlights
- Received purchase orders in July 2023 under existing contracts for delivery of InteliSwab® devices. These orders are expected to generate at least $70 million of revenue in the second half of 2023.
- Signed a collaboration to work on a multi-year project with the Regeneron Genetics Center® (RGC), a wholly-owned subsidiary of Regeneron Pharmaceuticals, Inc. that focuses on early gene discovery and functional genomics. RGC has chosen the OraGeneDx® device for all saliva collection requirements, along with leveraging OraSure's in-house kitting and single-order fulfillment services to remodel its DNA collection workflow.
- Continued progress on consolidating our manufacturing footprint to drive operating efficiencies, including re-shoring some of our capacity to the United States. We continue to make progress on the installation and testing of new equipment and automation capabilities at our new Opus Way facility in Bethlehem, Pa., in addition to our existing OraQuick® device automated production. As discussed in prior quarters, we expect this phase of the expansion to be completed in 2023, with additional facility consolidation to follow.
- Signed an agreement with the International Vaccine Institute (IVI) to utilize our Colli-Pee® first-void urine collection kits as part of a research study to understand the burden of human papillomavirus (HPV) among girls and women in low and lower middle-income countries.
- On track to achieve operating cash flow breakeven for the core business by the end of 2024.
Financial Guidance
The Company is guiding to Q3 2023 revenue of $72 to $77 million, which includes core revenue of $37 to $39 million and InteliSwab® revenue of $35 to $38 million. As part of our ongoing focus on enterprise-wide operating efficiency, the Company is on track to exceed the $15 million of annualized cost savings announced in Q1 2023.
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 June 30, | Six Months Ended June 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Results of Operations | |||||||||||||||
| Net revenues | $ | 85,441 | $ | 80,231 | $ | 240,404 | $ | 147,938 | |||||||
| Cost of products and services sold | 59,070 | 52,434 | 148,218 | 95,842 | |||||||||||
| Gross profit | 26,371 | 27,797 | 92,186 | 52,096 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 7,661 | 9,463 | 18,221 | 18,097 | |||||||||||
| Sales and marketing | 8,535 | 11,684 | 20,677 | 24,401 | |||||||||||
| General and administrative | 16,424 | 17,579 | 34,135 | 36,735 | |||||||||||
| Loss on impairment | 215 | 10,542 | 1,320 | 10,542 | |||||||||||
| Change in fair value of acquisition-related contingent consideration | (35 | ) | — | (59 | ) | (36 | ) | ||||||||
| Total operating expenses | 32,800 | 49,268 | 74,294 | 89,739 | |||||||||||
| Operating income (loss) | (6,429 | ) | (21,471 | ) | 17,892 | (37,643 | ) | ||||||||
| Other income | 1,467 | 1,713 | 4,140 | 1,881 | |||||||||||
| Income (loss) before income taxes | (4,962 | ) | (19,758 | ) | 22,032 | (35,762 | ) | ||||||||
| Income tax expense (benefit) | (166 | ) | (1,169 | ) | (391 | ) | 2,767 | ||||||||
| Net income (loss) | $ | (4,796 | ) | $ | (18,589 | ) | $ | 22,423 | $ | (38,529 | ) | ||||
| Earnings (loss) per share: | |||||||||||||||
| Basic | $ | (0.07 | |||||||||||||
