Immunotec Inc.
TSX VENTURE : IMM

Immunotec Inc.

June 21, 2010 09:00 ET

Immunotec Announces Positive Second Quarter Earnings Results

VAUDREUIL-DORION, QUEBEC--(Marketwire - June 21, 2010) - Immunotec Inc. (TSX VENTURE:IMM)

  • Active Distributors Up 15% to 28,700 after six months
  • Second Quarter Net Earnings of $193 thousand, compared to a loss of ($618) thousand for 2009.

Immunotec Inc. (TSX VENTURE:IMM), a Canadian based company and a leader in the wellness industry (the "Company"), today reported positive results with second quarter 2010, Net Earnings of $193 thousand for the quarter ending April 30, 2010, compared to a loss of ($618) thousand for 2009. After six month, Net Earnings achieved $403 thousand compared to a loss of ($819) thousand last year.

The Company's consolidated revenues totalled $9.8M for the second quarter of Fiscal 2010, as compared to $12.3M in the same period last year a decrease of 20% overall. Year-to-Date, consolidated revenues totalled $20.3M for the second quarter of Fiscal 2010, as compared to $23.0M in the same period last year a decrease of 12% after six months. This decrease in consolidated revenues is primarily due to the strengthening of the Canadian dollar over the US currency, using an average conversion rate ($1USD to CAD) of 1.0405 during second quarter of 2010 compared with an average rate of 1.2264 for the same period of 2009. This translated to fluctuations of approximately $1.0M for the quarter and $1.5M year to date.

For the quarter ended April 30, 2010, Non-GAAP adjusted EBITDA totalled $594 thousand or 6% of revenues compared to $67 thousand or 1% of revenues for Fiscal 2009. Importantly, after six months, the Company was able to maintain this non-GAAP adjusted EBITDA totalled $1.4M or 7% of revenues compared to $214 thousand or 1% of revenues for Fiscal 2009.

"Recurrent profitability for a second consecutive quarter is a demonstration that our business model is able to build shareholder value especially given the continued macro-economic downturn", said James A. Northrop, President and CEO of Immunotec Inc. "Our geographic expansion in Mexico, France and Germany will create growth opportunities in the near term".

Fiscal 2010 Financial Results Highlights:

  • During the quarter, Network sales reached $8.5M in 2010 compared to $10.3 for the same period in 2009, a decline of $1.8M or a 17% decrease. After six months, Network sales reached $17.3M in 2010 compared to $19.5 for the same period in 2009, a decline of $1.8M or a 11% decrease. This decrease is in large, part attributable to foreign exchange stemming from a much stronger Canadian dollar in 2010. The average Canadian dollars value used during the period was 1.0405 during fiscal 2010 compared to 1.2264 for the same period of 2009.

  • Other revenues reached $1.3M in 2010 compared to $2.0M for the same period in 2009. After six months, Other Revenues reached $3.0M in 2010 compared to $3.4M for the same period in 2009, a decline of $0.4M. Both the quarterly and year-to-date decline result of timing of purchasing and weaker export into the Southeast Asia and potentially lasting impact of global economic conditions explains this situation.

  • Margin before expenses, as a percentage of net sales improved to 32% compared to only 26% for year 2009. This improvement, despite the lower revenues, is attributed to changes made on the sales incentive program launched in 2009. Sales incentives – Network is the largest segment of the variable expenses of the Company. As a percentage of Network sales, the incentive program represented, after six months, an average of 48%, an improvement from the 55% level in 2009.

  • Expenses defined below as being the cumulative amounts of Administration, Marketing, Sales, Quality Control and Research & Development expenses were $2.6M for the three-month period ended April 30, 2010 and stable with the previous period representing 26% of total revenues. Importantly, the Company has been prudent in the area of marketing and sales expenditure during the first six months of fiscal 2010 demonstrating an improvement of 2%, when compared to the same period last year over the ratio of 27% in 2009.

  • The total basic and fully diluted earnings per share for the second quarter and year-to-date of Fiscal 2010 was respectively $0.003 and $0.006, compared to a basic and fully diluted loss per share of ($0.009) and ($0.012) for the same period in Fiscal 2009.

About Immunotec Inc.

Immunotec is a Network Marketing Company involved in the direct selling of scientifically validated natural health products and dietary supplements. The Company offers a lucrative business opportunity to its independent distributors. This business model provides Immunotec's network of people with an opportunity to earn a steady and recurring income, directly based on their level of involvement and performance. Individual distributors build their business by conveying product information and selling product to customers and by building teams of distributors to expand geographic penetration and market coverage to larger populations of customers.

Headquartered with manufacturing facilities near Montreal, Canada, the Company also subcontracts certain distribution logistics and capacity to support its activities in the United States, Europe, Mexico and The Caribbean.

The Company files its consolidated financial statements, its management and discussion analysis report, its press releases and such other required documents on the SEDAR database at www.sedar.com and on the Company's website at www.immunotec.com. The common shares of the Company are listed on the TSX Venture Exchange under the ticker symbol IMM.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For information identifying known risks and uncertainties and other important factors that could cause actual results to differ materially from those anticipated in the forward- looking statements, please refer to the heading Risks and Uncertainties in Immunotec's most recent Management's Discussion and Analysis, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.

INTERIM CONSOLIDATED BALANCE SHEET        
(UNAUDITED)        
  As at April 30,   As at October 31,  
  2010   2009  
  $   $  
ASSETS        
Current        
  Cash 2,597,940   2,262,821  
  Accounts receivable 600,148   201,841  
  Income taxes receivable 20,158   70,306  
  Inventories 3,055,448   3,941,847  
  Prepaid expenses 875,406   436,251  
  Future income taxes 101,281   90,133  
  7,250,381   7,003,199  
Long-term        
  Property, plant and equipment 5,858,454   6,068,313  
  Intangible assets 2,324,335   2,505,937  
  Goodwill 499,541   499,541  
  Future income taxes 1,829,125   1,969,403  
  Other assets (note 3) 656,397   699,839  
  18,418,233   18,746,232  
LIABILITIES AND SHAREHOLDERS' EQUITY        
Current liabilities        
  Accounts payable 2,770,140   2,629,247  
  Accrued liabilities 824,386   1,881,390  
  Customer deposits 416,442   308,557  
  4,010,968   4,819,194  
Shareholders' Equity (Deficit)        
  Share capital (note 4) 3,465,548   3,465,548  
  Other equity - Stock options (note 5) 1,847,609   1,770,093  
  Contributed surplus 11,337,796   11,337,796  
  Deficit (2,243,688 ) (2,646,399 )
  14,407,265   13,927,038  
  18,418,233   18,746,232  
         

Consolidated Statements of Changes in Shareholders' Equity (Deficit)

      Other          
  Number of   equity   (Deficit)      
  common Share -Stock Contributed Retained      
(UNAUDITED)  shares capital options surplus earnings   Total  
                 
    $ $ $ $   $  
   
Balance - October 31, 2008 69,994,300 3,465,548 1,414,885 11,332,143 1,898,637   18,111,213  
   
Net loss - - - - (818,741 ) (818,741 )
Stock- based compensation (note 5) - - 193,160 5,653 -   198,813  
   
Balance - April 30, 2009 69,994,300 3,465,548 1,608,045 11,337,796 1,079,896   17,491,285  
   
   
   
Balance - October 31, 2009 69,994,300 3,465,548 1,770,093 11,337,796 (2,646,399 ) 13,927,038  
   
Net profit - - - - 402,711   402,711  
Stock- based compensation (note 5) - - 77,516 - -   77,516  
   
Balance - April 30, 2010 69,994,300 3,465,548 1,847,609 11,337,796 (2,243,688 ) 14,407,265  
         
         
         
         
INTERIM CONSOLIDATED STATEMENT OF EARNINGS
(LOSS) AND COMPREHENSIVE INCOME
For the three-month
period ended
April 30th
  For the six-month
period ended
April 30th
 
(UNAUDITED) 2010   2009   2010   2009  
  $   $   $   $  
REVENUES                
  Network sales 8,476,671   10,278,428   17,342,315   19,513,295  
  Other revenue 1,341,812   1,988,074   2,957,238   3,444,716  
  9,818,483   12,266,502   20,299,553   22,958,011  
VARIABLE COSTS                
  Cost of goods sold (excluding amortization) 1,615,846   2,016,652   3,638,097   3,746,114  
  Sales incentives - Network 4,148,842   5,933,487   8,397,171   10,802,136  
  Other variable costs 892,362   1,108,781   1,792,934   2,065,670  
  Margin before expenses 3,161,433   3,207,582   6,471,351   6,344,091  
   
Expenses                
  Administrative 1,312,699   1,606,417   2,723,011   3,056,525  
  Marketing and Selling 966,449   1,265,188   1,827,051   2,557,496  
  Quality and Development costs 288,301   269,414   540,204   515,993  
  Amortization 288,282   265,578   575,311   529,406  
  Other non cash expenses 27,913   76,497   77,516   198,813  
  2,883,644   3,483,094   5,743,093   6,858,233  
Earnings (Loss) from continuing operations before                
income taxes 277,789   (275,512 ) 728,258   (514,142 )
   
Income taxes (Recovery)                
  Current 30,175   (21,451 ) 55,161   38,001  
  Future 46,237   (94,264 ) 129,130   (191,141 )
Earnings (Loss) from continued operations 201,377   (159,797 ) 543,967   (361,002 )
   
Loss from discontinued operations (7,967 ) (457,739 ) (141,256 ) (457,739 )
(loss) 193,410   (617,536 ) 402,711   (818,741 )
   
Basic and diluted net earnings (loss) per share                
  Continuing operations 0.003   (0.002 ) 0.008   (0.005 )
  Discontinued operations (0.000 ) (0.007 ) (0.002 ) (0.007 )
Total basic and diluted net earnings (loss) per share 0.003   (0.009 ) 0.006   (0.012 )
   
Weighted average number of common shares outstanding              
during the period                
Basic and diluted 69,994,300   69,994,300   69,994,300   69,994,300  
         
         
         
         
CONSOLIDATED STATEMENT OF CASH FLOWS For the three-month
period
ended April 30th
  For the six-month
period
ended April 30th
 
(UNAUDITED) 2010   2009   2010   2009  
  $   $   $   $  
Operating activities                
Net earnings (loss) 193,410   (617,536 ) 402,711   (818,741 )
Loss from discontinued operations (7,967 ) (457,739 ) (141,256 ) (457,739 )
Earnings (Loss) from continuing operations 201,377   (159,797 ) 543,967   (361,002 )
Add (deduct) non cash items:                
  Amortization of property, plant and equipment 152,577   132,829   293,723   265,237  
  Amortization of intangible assets 135,705   132,749   281,588   264,169  
  Other receivable -       43,442      
  Future income taxes 46,237   (94,264 ) 129,130   (191,141 )
  Stock- based compensation 27,913   76,497   77,516   198,813  
Cash received prior to working capital variation 563,809   88,014   1,369,366   176,076  
Net change in non- cash working capital (162,191 ) (1,721,266 ) (709,141 ) (2,078,265 )
Cash (used) received in operating activities 401,618   (1,633,252 ) 660,225   (1,902,189 )
Investing activities                
Additions to property, plant and equipment (56,175 ) (48,900 ) (83,864 ) (84,205 )
Additions to intangible assets (84,367 ) (184,489 ) (99,986 ) (311,663 )
Research and development tax credits -   (13,272 ) -   (26,544 )
Cash used in investing activities (140,542 ) (246,661 ) (183,850 ) (422,412 )
Net increase (decrease) in cash from continuing activities 261,076   (1,879,913 ) 476,375   (2,324,601 )
Net (decrease) in cash from discontinued activities                
  Operating activities (7,967 ) (466,135 ) (141,256 ) (466,135 )
  Investing activities -   (123,165 ) -   (123,165 )
  (7,967 ) (589,300 ) (141,256 ) (589,300 )
Net increase (decrease) in cash during the quarter 253,109   (2,469,213 ) 335,119   (2,913,901 )
Cash at the beginning of the quarter 2,344,831   5,693,766   2,262,821   6,138,454  
Cash at the end of the quarter 2,597,940   3,224,553   2,597,940   3,224,553  
   
Supplemental information                
Income taxes (recovered) paid during the quarter 19,937   42,383   11,414   76,322  

The TSX Venture does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Patrick Montpetit
    VP and Chief Financial Officer
    450-510-4527