Immunotec Inc.
TSX VENTURE : IMM

Immunotec Inc.

September 17, 2010 16:17 ET

Immunotec Announces Financial Results for the Third Quarter Ended July 31, 2010

Non-GAAP adjusted EBITDA (1)of $1.4M after nine months, compared to a negative ($148) thousand for 2009

VAUDREUIL-DORION, QUEBEC--(Marketwire - Sept. 17, 2010) - Immunotec Inc. (TSX VENTURE:IMM), a Canadian based company and a leader in the wellness industry (the "Company"), today reported financial results for the third quarter of fiscal year 2011. Revenues after nine months totalled $30.3 M, compared to $34.0 M for the corresponding period last fiscal year. Net earnings (Loss) and comprehensive income (loss) after nine month totalled $9 thousand, versus ($3.3) M last fiscal year. After nine months and despite absorbing this new acquisition in Mexico, the Company was able to maintain an adjusted EBITDA(1) of $1.4M or 5% of revenues compared to a loss $148 thousand or for Fiscal 2009.

"The integration of our new Mexican business is going even better than we expected", said James A. Northrop, President and CEO of Immunotec Inc. "We will not lose our focus and go after the US market despite challenges in the Economy".

Q3 of Fiscal 2010 Financial Results Highlights:

The Company's consolidated revenues totalled $10.0M for the third quarter of Fiscal 2010, as compared to $11.0M in the same period last year a decrease of 10% overall. This decrease in consolidated revenues is primarily due to:

  1. The strengthening of the Canadian dollar over the US currency, using an average conversion rate ($1USD to CAD) of 1.0414 during third quarter of 2010 compared with an average rate of 1.2020 for the same period of 2009. This translated to fluctuations of approximately $0.4M for the quarter and $2.1M year to date.

  2. Export revenues overall are lower by $0.3M for the quarter and $0.6M on a year-to-date basis. Management the impact of global economic conditions has contributed to this shortfall.

Despite softer revenues, the Company improved its margins before expenses to reach 31% of total consolidated revenues during the quarter and over the first nine months of 2010, as compared to 27% for the same period last year. This improvement in margins of approximately 4% comes mostly from needed adjustments to the variable costs, incentive programs and promotions.

(1) EBITDA means "Earnings before taxes, depreciation and amortization". For more information please refer to the section "Non-GAAP & Other Measures "of the Management Discussion and Analysis dated September 17, 2010.

Expenses, during the third quarter, increased as a result of consolidation the new entity in Mexico to totalled $3.5M remaining lower than the previous year at $3.7M that did not include the Mexican operation.

Net earnings (loss) and comprehensive income (loss) achieved a loss of ($393) thousand for the quarter ending July 31, 2010, compared to a loss of ($2,528) thousand for 2009. The total basic and fully diluted earnings per share for the third quarter of Fiscal 2010 was respectively ($0.006), compared to f ($0.036) 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.

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

 Immunotec Inc.    
 Interim Consolidated Balance Sheet    
 (Unaudited)    
     
  As at
July 31,
  As at
October 31,
 
   2010    2009  
  $   $  
   
ASSETS        
   
Current        
  Cash 2,112,677   2,262,821  
  Accounts receivable 641,664   201,841  
  Income taxes receivable -   70,306  
  Inventories 2,998,002   3,941,847  
  Prepaid expenses 747,199   436,251  
  Future income taxes 62,835   90,133  
  6,562,377   7,003,199  
Long-term        
   
  Property, plant and equipment 5,813,277   6,068,313  
  Intangible assets 2,622,679   2,505,937  
  Goodwill 499,541   499,541  
  Future income taxes 1,960,811   1,969,403  
  Other assets 629,647   699,839  
  18,088,332   18,746,232  
   
LIABILITIES AND SHAREHOLDERS' EQUITY      
Current liabilities        
  Accounts payable 2,531,011   2,629,247  
  Accrued liabilities 1,201,259   1,881,390  
  Customer deposits 301,281   308,557  
  Income taxes payable 11,509   -  
  4,045,060   4,819,194  
Shareholders' Equity (Deficit)        
  Share capital 3,465,548   3,465,548  
  Other equity - Stock options 1,876,908   1,770,093  
  Contributed surplus 11,337,796   11,337,796  
  Deficit (2,636,980 ) (2,646,399 )
  14,043,272   13,927,038  
  18,088,332   18,746,232  

 

   
   
   
Immunotec Inc.  
Interim Consolidated Statements of Changes in Shareholders' Equity  
(Unaudited)  
   
      Other Contri-        
   Number of    equity  buted  (Deficit)      
  common Share -Stock surplus Retained      
  shares capital options   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 - - - - (3,346,944 ) (3,346,944 )
Stock-based compensation - - 277,312 5,653 -   282,965  
   
Balance - July 31, 2009 69,994,300 3,465,548 1,692,197 11,337,796 (1,448,307 ) 15,047,234  
                 
                 
Balance - October 31, 2009 69,994,300 3,465,548 1,770,093 11,337,796 (2,646,399 ) 13,927,038  
   
Net profit - - - - 9,419   9,419  
Stock-based compensation (note 6) - - 106,815 - -   106,815  
                 
Balance - July 31, 2010 69,994,300 3,465,548 1,876,908 11,337,796 (2,636,980 ) 14,043,272  
   
   
   
Immunotec Inc.  
Interim Consolidated Statement of Earnings (Loss) and Comprehensive Income  
(Unaudited)  
   
  For the three-month period ended   For the nine-month period ended  
      July 31,       July 31,  
  2010   2009   2010   2009  
  $   $   $   $  
   
REVENUES                
  Network sales 8,550,885   9,044,505   25,893,200   28,557,800  
  Other revenue 1,406,377   1,959,164   4,363,615   5,403,880  
  9,957,262   11,003,669   30,256,815   33,961,680  
VARIABLE COSTS                
  Cost of goods sold (excluding amortization) 1,977,025   2,239,316   5,615,122   5,985,430  
  Sales incentives - Network 3,988,117   4,748,852   12,385,288   15,550,988  
  Other variable costs 940,940   1,036,158   2,733,874   3,101,828  
  Margin before expenses 3,051,180   2,979,343   9,522,531   9,323,434  
   
Expenses                
  Administrative 1,647,105   1,710,268   4,370,116   4,766,793  
  Marketing and Selling 1,090,737   1,424,142   2,917,788   3,981,638  
  Quality and Development costs 317,191   207,443   857,395   723,436  
  Amortization 295,819   237,393   871,130   766,799  
  Restructuring charges 156,813   -   156,813   -  
  Other non cash expenses 29,299   84,152   106,815   282,965  
  3,536,964   3,663,398   9,280,057   10,521,631  
   
   
Earnings (Loss) from continuing operations before income taxes (485,784 ) (684,055 ) 242,474   (1,198,197 )
   
Income taxes (Recovery)                
  Current (12,062 ) (15,302 ) 43,099   22,699  
  Future (93,240 ) 10,454   35,890   (180,687 )
Earnings (Loss) from continued operations (380,482 ) (679,207 ) 163,485   (1,040,209 )
   
Loss from discontinued operations (12,810 ) (1,848,996 ) (154,066 ) (2,306,735 )
Net earnings (loss) and comprehensive income (loss) (393,292 ) (2,528,203 ) 9,419   (3,346,944 )
   
Basic and diluted net earnings (loss) per share                
  Continuing operations (0.006 ) (0.010 ) 0.002   (0.015 )
  Discontinued operations 0.000   (0.026 ) (0.002 ) (0.033 )
Total basic and diluted net earnings (loss) per share (0.006 ) (0.036 ) 0.000   (0.048 )
   
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  
               
               
               
Immunotec Inc.  
Consolidated Statement of Cash Flows  
(Unaudited)  
   
  For the three-month period ended   For the nine-month period ended  
      July 31,       July 31,  
  2010   2009   2010   2009  
  $   $   $   $  
   
Operating activities                
Net earnings (loss) (393,292 ) (2,528,203 ) 9,419   (3,346,944 )
Loss from discontinued operations (12,810 ) (1,848,996 ) (154,066 ) (2,306,735 )
Earnings (Loss) from continuing operations (380,482 ) (679,207 ) 163,485   (1,040,209 )
Add (deduct) non cash items:                
    Amortization of property, plant and equipment 150,044   102,997   443,767   368,234  
    Amortization of intangible assets 145,775   134,396   427,363   398,565  
    Net loss (gain) on disposal of property, plant 474   (46,608 ) 474   (46,608 )
    and equipment                
    Other receivables 26,750   -   70,192   -  
    Future income taxes (93,240 ) 10,454   35,890   (180,687 )
    Stock-based compensation 29,299   84,152   106,815   282,965  
Cash received prior to working capital variation (121,380 ) (393,816 ) 1,247,986   (217,740 )
   
Net change in non-cash working capital 565,891   140,432   (143,250 ) (1,891,660 )
Cash (used) received in operating activities 444,511   (253,384 ) 1,104,736   (2,109,400 )
Investing activities                
  Business acquisition (771,014 ) -   (771,014 ) -  
  Additions to property, plant and equipment (105,741 ) (441,261 ) (189,605 ) (525,466 )
  Additions to intangible assets (40,609 ) (64,362 ) (140,595 ) (376,025 )
  Proceed from disposal of property, plant and equipment 400   524,500   400   524,500  
  Research and development tax credits -   (13,272 ) -   (39,816 )
Cash used in investing activities (916,964 ) 5,605   (1,100,814 ) (416,807 )
Net increase (decrease) in cash from continuing activities (472,453 ) (247,779 ) 3,922   (2,526,207 )
Net (decrease) in cash from discontinued activities                
    Operating activities (12,810 ) (438,717 ) (154,066 ) (1,745,051 )
    Investing activities -   (8,686 ) -   (131,851 )
  (12,810 ) (447,403 ) (154,066 ) (1,876,902 )
Net decrease in cash during the period (485,263 ) (695,182 ) (150,144 ) (4,403,109 )
Cash at the beginning of the period 2,597,940   2,430,527   2,262,821   6,138,454  
Cash at the end of the period 2,112,677   1,735,345   2,112,677   1,735,345  
   
Supplemental information                
Income taxes (recovered) paid during the period (45,097 ) (8,670 ) (33,683 ) 67,652  

Contact Information

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