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SOURCE: Chembio Diagnostics, Inc.
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August 04, 2008 16:10 ET
Chembio Reports Record Total Revenues in Second Quarter
Conference Call Scheduled for Monday, August 4 at 4:30 p.m. Eastern Time
MEDFORD, NY--(Marketwire - August 4, 2008) - Chembio Diagnostics, Inc. (OTCBB: CEMI) today
reported financial results for the three and six months ended June 30,
2008.
Total revenues for the second quarter of 2008 were higher than any previous
quarter at $2.72 million, an 8.6% increase compared with second quarter
2007 revenues of $2.50 million. This revenue growth came from $46,000 of
increased product revenues and $169,000 of increased research and grant
revenues. The increased product revenues for the second quarter of 2008
included an increase in rapid HIV test revenues of $61,500 to $2.21 million
or 2.9% from $2.15 million in the same period of 2007.
The net loss attributable to common stockholders decreased 63% to $363,000,
or $0.01 per share, for the second quarter of 2008 compared to a net loss
attributable to common stockholders of $983,000, or $0.08 per share, for
the second quarter of 2007. The net loss attributable to common
stockholders for the second quarter of 2007 included $357,000 in non-cash
dividends to preferred stockholders. As previously reported, all of the
Company's convertible preferred stock was converted into common stock in
December 2007, which resulted in no preferred stock dividends in the second
quarter of 2008.
Total revenues for the first half of 2008 were $5.08 million, an 11.9%
increase compared with first half 2007 total revenues of $4.54 million.
First half 2008 revenue growth came from $259,000 of increased product
revenues and $283,000 of increased research and grant revenues. The
increased product revenues for the first half of 2008 included an increase
in rapid HIV test revenue of $171,000 to $4.13 million or 4.3% from $3.96
million in the same period of 2007. In addition, revenues from
Tuberculosis tests increased by $59,000 in the first half of 2008 compared
with the same period in 2007.
The net loss attributable to common stockholders decreased 43.8% to
$1,161,000, or $0.02 per share, for the first half of 2008 compared to a
net loss attributable to common stockholders of $2.07 million or $0.17 per
share for the first half of 2007. The net loss attributable to common
stockholders for the first half of 2007 included $711,000 in non-cash
dividends to preferred stockholders. As previously reported, all of the
Company's convertible preferred stock was converted into common stock in
December 2007, which resulted in no preferred stock dividends in the first
half of 2008.
Second Quarter and Recent Highlights
-- In addition to posting record quarterly total revenue, in the second
quarter of 2008 the Company posted its lowest quarterly operating loss
since the merger with Chembio Diagnostic Systems, Inc. in May 2004.
-- Strong sales of rapid HIV tests to Brazil and Africa offset decreased
sales of these products in the US. The decreased sales in the US are
due to a slower ramp in US rapid HIV test sales. The slower ramp is
partially due to the delay in obtaining the approval of our PMA
supplement to expand our HIV age testing range to include 13 to 17 year
olds. As reported in June we completed the required clinical study for
submitting this. In July we submitted the PMA supplement to the FDA,
and we are now waiting for its review to be completed. This change,
together with multiple initiatives by our marketing partner to expand
distribution of our products, and now new studies by the United States
Centers for Disease Control reported this past weekend of a 40%
under-reporting of HIV incidence in the United States, should increase
potential sales opportunities in the U.S. over the long term.
-- We remain bullish about our potential increased participation in the
global, as well as domestic, rapid HIV test market. We are pleased with
the more than tripling of the PEPFAR (U.S. President's Emergency Plan
for AIDS Relief) program signed into law last week by the President to
$48 billion over the next five years, and with the increased emphasis on
testing that is in the new legislation. As the only US-based
manufacturer of competitively priced rapid HIV tests, we look forward to
the potential of increased participation in PEPFAR.
-- Gross Profit increased 30.75% to $1,296,000 reflecting improved average
unit selling prices and continued improvements in manufacturing
efficiencies compared to a year ago.
-- Operating Loss decreased 44% to $365,259 as operating expenses (R&D and
SG&A) increased less than 1% from the second quarter of 2007.
-- All studies required to file for CE Marking of our FDA-approved HIV
tests are now complete. The CE marking certifies that a product has
met European Union health, safety, and environmental requirements. We
anticipate submitting the technical file very soon and therefore
receiving CE marking this year
-- Our patented DPP® platform is providing the Company with an historic
number of new product opportunities:
-- We have completed development of the three DPP® products in
connection with our contract with the Brazilian Ministry of Health;
tests for antibody detection of canine Leishmaniasis, Leptospirosis
and our first multiplex DPP® test, which is a point of care test
for the confirmation (as compared with screening) of HIV. We are in
the process of validating these initial products in order to scale
up their manufacture during the third and fourth quarter. Our current
forecast is to generate at least $500,000 of product and license
revenues from these products during the balance of 2008.
-- We have completed development of our DPP® HIV screening test as a
result of the successful conclusion of preclinical trials we
conducted during the second quarter. We are now validating this
product for production scale-up as well, and finalizing product
inserts and packaging so that export sales can begin as soon as
possible. We also are in discussions with potential marketing
partners for this product in the United States, which would require
a new PMA submission.
-- We have made excellent progress on the product development project
we entered with Bio-Rad Laboratories, Inc. We anticipate completing
the initial phase of this development during the next couple of
months, and thereupon proceeding to a long-term development and
license agreement with Bio Rad.
-- We are also completing development of our Syphilis screen and
confirm test and have several new OEM product opportunities under
discussion for DPP®. We are seeing an increasing interest in the
combination of our intellectual property with our development and
manufacturing capabilities.
-- During the second quarter we also received from the United States
National Institutes of Health a $296,000 grant for development of a
DPP® TB test.
-- The United States Patent and Trademark Office (USPTO) issued Chembio
an additional patent during the second quarter covering a point of
care rapid test platform that serves to broaden our intellectual
property coverage.
-- The USPTO also issued us the registration of our DPP® trademark,
enabling increased protection for this intellectual property.
Lawrence Siebert, President and CEO, commented, "We are pleased at the
continued improvements from our base lateral flow business as we approach
realizing new revenue streams from our DPP® products. We expect to
continue this momentum despite a difficult economic environment as our
products serve a global market. On a personal note, I am deeply saddened
by the passing of Alan Carus, who was an outstanding and valued member of
our Board of Directors and chairman of our Audit Committee since 2005. Al
worked tirelessly, was a tremendous asset to Chembio, and he will be sorely
missed."
Conference Call
As previously announced, Chembio has scheduled a conference call and
webcast for 4:30 p.m. Eastern time on Monday, August 4, 2008. Participants
may access the call by dialing (877) 407-0782 from the U.S. or (201)
689-8567 from outside the U.S. In addition, following the completion of the
call, a telephone replay will be accessible until August 11, 2008 at 11:59
p.m. Eastern Time by dialing (877) 660-6853 from the U.S. or (201) 612-7415
from outside the U.S. and entering reservation account number 286 and
conference ID 292790. The conference call may also be accessed via the
internet at http://www.investorcalendar.com/IC/CEPage.asp?ID=132435. An
archive of the webcast will be available for 90 days on the Company's
website at www.chembio.com.
ABOUT CHEMBIO
Chembio Diagnostics, Inc. develops, manufactures, licenses and markets
proprietary rapid diagnostic tests in the growing $5 billion point-of-care
testing market. Chembio's two FDA PMA-approved, CLIA-waived, rapid HIV
tests are marketed in the U.S. by a third-party company. Chembio markets
its HIV STAT-PAK® line of rapid HIV tests internationally to government
and donor-funded programs directly and through distributors. Chembio also
has rapid tests for veterinary tuberculosis and chagas disease. In 2007
Chembio received a U.S. patent for its Dual Path Platform (DPP®)
technology which has significant advantages over lateral-flow technologies.
This technology is providing Chembio with a significant pipeline of
business opportunities for the development and manufacture of new products
based on DPP™. Headquartered in Medford, NY, with approximately 100
employees, Chembio is licensed by the U.S. Food and Drug Administration
(FDA) as well as the U. S. Department of Agriculture (USDA), and is
certified for the global market under the International Standards
Organization (ISO) directive 13.485.
Forward-Looking Statements
Statements contained herein that are not historical facts may be
forward-looking statements within the meaning of the Securities Act of
1933, as amended. Forward-looking statements include statements regarding
the intent, belief or current expectations of the Company and its
management. Such statements are estimates only, as the Company has not
completed the preparation of its financial statements for those periods,
nor has its auditor completed the audit of those results. Actual revenue
may differ materially from those anticipated in this press release. Such
statements reflect management's current views, are based on certain
assumptions and involve risks and uncertainties. Actual results, events,
or performance may differ materially from the above forward-looking
statements due to a number of important factors, and will be dependent upon
a variety of factors, including, but not limited to Chembio's ability to
obtain additional financing, to obtain regulatory approvals in a timely
manner and the demand for Chembio's products. Chembio undertakes no
obligation to publicly update these forward-looking statements to reflect
events or circumstances that occur after the date hereof or to reflect any
change in Chembio's expectations with regard to these forward-looking
statements or the occurrence of unanticipated events. Factors that may
impact Chembio's success are more fully disclosed in Chembio's most recent
public filings with the U.S. Securities and Exchange Commission.
(Tables to follow)
Chembio Diagnostics, Inc.
Summary of Results of Operations
For the three months ended For the six months ended
-------------------------- --------------------------
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
============ ============ ============ ============
Total Revenues $ 2,717,784 $ 2,502,773 $ 5,082,512 $ 4,541,093
Gross Profit $ 1,296,809 $ 991,900 $ 2,358,731 $ 1,651,718
Operating Loss $ (365,259) $ (654,597) $ (1,176,828) $ (1,565,735)
Net Loss $ (363,129) $ (625,856) $ (1,161,311) $ (1,354,662)
Preferred
Dividends, Deemed
Dividends and
Beneficial
Conversion Feature - $ 356,900 - $ 710,878
Net Loss
Attributable to
Common
Stockholders $ (363,129) $ (982,756) $ (1,161,311) $ (2,065,540)
Loss per share $ (0.01) $ (0.08) $ (0.02) $ (0.17)
Chembio Diagnostics, Inc.
Summary of Balance Sheet
June 30, December 31,
2008 2007
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CURRENT ASSETS:
Cash $ 954,157 $ 2,827,369
Other current assets 3,195,964 2,643,938
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TOTAL CURRENT ASSETS 4,150,121 5,471,307
NET FIXED ASSETS 964,542 829,332
OTHER ASSETS 1,103,970 284,358
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$ 6,218,633 $ 6,584,997
============== ==============
TOTAL CURRENT LIABILITIES $ 2,323,476 $ 2,242,583
TOTAL OTHER LIABILITIES 570,519 79,588
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TOTAL LIABILITIES 2,893,995 2,322,171
TOTAL STOCKHOLDERS’ EQUITY (DEFICIENCY) 3,324,638 4,262,826
-------------- --------------
$ 6,218,633 $ 6,584,997
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