Immunotec Inc.
TSX VENTURE : IMM

Immunotec Inc.

February 21, 2011 18:47 ET

Immunotec Announces Financial Results for the Year Ended October 31, 2010

VAUDREUIL-DORION, QUEBEC--(Marketwire - Feb. 21, 2011) -  Immunotec Inc. (TSX VENTURE:IMM), a Canadian based company and a leader in the wellness industry (the "Company"), today reported financial results for the fiscal year 2010. Revenues totalled $40.3 million, compared to $44.7 million for the corresponding period last fiscal year. Importantly, the Company was able to maintain an adjusted EBITDA of $774 thousand or 2% of revenues compared to a negative $228 thousand for Fiscal 2009. Net loss and comprehensive loss were ($1,387) thousand compared to a loss of ($4,545) thousand last year.

During the fourth quarter and in subsequent events, the Company completed its full restructuring with several nominations to its management team. "Fiscal 2011 will be the rebirth of this Company", said Bob Henry, Immunotec's Executive Chairman and CEO "Last week we celebrated our fifteenth anniversary and I am confident that we will increase our positioning in the US".

Other Financial Results Highlights for Fiscal 2010:

Network sales reached $34.5M in 2010 compared to $37.9M for the same period in 2009, a decrease of 9% or $3.4M. Other revenues include licensing revenues, freight and shipping, charge backs and educational material purchased by our network, reached $5.9M in 2010, a decrease of $0.9M compared to $6.8M for the same period in 2009. The consolidated decrease in total revenues of $4.4M is explained by the following:

  • A reduction in revenues, calculated in local currency, of $3.4M in our two key markets, represents an actual decline of 9% excluding the impact of currency fluctuations.

  • The strengthening of the Canadian dollar over the US currency accounts for $2.3M. The average Canadian dollar value used during the period was 1.0383 during Fiscal 2010, a decrease of 11.3% compared to 1.1700 for the same period of 2009.

  • We recorded an increase of $1.3M in sales from new distributors in Mexico along with an increase in revenues from other international business, which partially offsets the above.  

Margins before expenses, as a percentage of net sales, improved in 2010 to 31.0% compared to 27.6% for year 2009. This improvement, despite lower revenues, is attributed to changes made to the sales incentive program launched in 2009.

The Network is the largest segment of the variable expenses of the Company. As a percentage of Network sales, the incentive program represented an average of 47.7%, compared to the 53.4% level in 2009.

Operating expenses were $822 thousand below the prior year. Despite reduced costs in the areas of marketing and administration, operating expenses were a full percentage point higher when compared to the prior year. The Company also invested more into Development costs and launched in February 2011, two new products.

About Immunotec Inc.

Immunotec is a world class business opportunity supported by unique scientifically proven products that improve wellness. Headquartered with manufacturing facilities near Montreal, Canada, the Company also has distribution capacities to support its commercial activities in Canada and internationally to 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.

Consolidated Balance Sheets
 
 
 
  As at October 31 2010   2009    
    $   $    
 
  ASSETS          
  Current          
  Cash 2,936,456   2,262,821    
  Accounts receivable 782,557   201,841    
  Income taxes receivable -   70,306    
  Inventories 2,605,371   3,941,847    
  Prepaid expenses 382,794   436,251    
  Future income taxes 103,099   90,133    
    6,810,277   7,003,199    
  Long-term          
             
  Property, plant and equipment 5,674,090   6,068,313    
  Intangible assets 2,456,651   2,505,937    
  Goodwill 833,559   499,541    
  Future income taxes 2,382,148   1,969,403    
  Other assets 484,349   699,839    
    18,641,074   18,746,232    
 
  LIABILITIES AND SHAREHOLDERS' DEFICIT          
  Current liabilities          
  Demand loan 1,000,000   -    
  Accounts payable 1,593,697   1,227,368    
  Accrued liabilities 2,707,076   3,283,269    
  Customer deposits 274,051   308,557    
  Income taxes payable 2,041   -    
  Other liability - current portion 147,218   -    
    5,724,083   4,819,194    
 
  Other liability 239,622   -    
    5,963,705   4,819,194    
 
 
  Shareholders' Deficit          
  Share capital 3,465,548   3,465,548    
  Other equity - Stock options 1,907,584   1,770,093    
  Contributed surplus 11,337,796   11,337,796    
  Deficit (4,033,559 ) (2,646,399 )  
    12,677,369   13,927,038    
    18,641,074   18,746,232    
   
   
   
   
   
Consolidated Statements of Changes in Shareholders' Deficit  
   
  Number of   Other equity     (Deficit)      
  common Share - Stock   Contributed Retained      
  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 - - -   - (4,545,036 ) (4,545,036 )
Stock-based compensation - - 355,208   5,653 -   360,861  
                   
Balance - October 31, 2009 69,994,300 3,465,548 1,770,093   11,337,796 (2,646,399 ) 13,927,038  
                   
                   
Net loss - - -   - (1,387,160 ) (1,387,160 )
Stock-based compensation - - 137,491   - -   137,491  
                   
                   
Balance - October 31, 2010 69,994,300 3,465,548 1,907,584   11,337,796 (4,033,559 ) 12,677,369  
                   
                   
 
         
         
         
Consolidated Statements of Loss and Comprehensive Loss    
         
Years ended October 31 2010   2009  
  $   $  
   
REVENUES        
Network sales 34,453,216   37,909,574  
Other revenue 5,888,000   6,815,130  
  40,341,216   44,724,704  
VARIABLE COSTS        
Cost of goods sold (excluding amortization) 7,729,873   7,996,599  
Sales incentives - Network 16,444,572   20,241,290  
Other variable costs 3,654,375   4,154,662  
Margin before expenses 12,512,396   12,332,153  
         
Expenses        
Administrative 6,403,627   6,516,487  
Marketing and Selling 4,400,073   5,096,634  
Quality and Development costs 1,182,394   946,790  
Amortization 1,193,102   1,079,729  
Impairment on other assets -   736,000  
Restructuring charges 749,794   437,805  
Stock-based compensation 137,491   360,861  
(Gain) loss on foreign exchange (59,015 ) 29,082  
  14,007,466   15,203,388  
         
         
Loss from continuing operations before income taxes (1,495,070 ) (2,871,235 )
         
Income taxes (Recovery)        
Current 98,180   39,789  
Future (425,711 ) (236,677 )
Loss from continued operations (1,167,539 ) (2,674,347 )
         
Loss from discontinued operations (219,621 ) (1,870,689 )
Net loss and comprehensive loss (1,387,160 ) (4,545,036 )
         
Basic and diluted net loss per share        
Continuing operations (0.017 ) (0.038)  
Discontinued operations (0.003 ) (0.027)  
Total basic and diluted net loss per share (0.020 ) (0.065)  
         
Weighted average number of common shares outstanding        
during the period        
Basic and diluted 69,994,300   69,994,300  
         
         
         
Consolidated Statement of Cash Flows  
   
   
Years ended October 31 2010   2009  
  $   $  
Operating activities        
Net loss (1,387,160 ) (4,545,036 )
Loss from discontinued operations (219,621 ) (1,870,689 )
Loss from continuing operations (1,167,539 ) (2,674,347 )
Add (deduct) non cash items:        
  Amortization of property, plant and equipment 596,468   537,881  
  Amortization of intangible assets 596,634   541,848  
  Net loss (gain) on disposal of property, plant        
  and equipment and intangible assets 474   (46,232 )
  Other receivables 196,954   -  
  Impairment on other assets -   736,000  
  Future income taxes (425,711 ) (236,677 )
  Stock-based compensation 137,491   360,861  
Cash received prior to working capital variation (65,229 ) (780,666 )
         
Net change in non-cash working capital 932,870   73,824  
Cash (used) received in operating activities 867,641   (706,842 )
Investing activities        
Business acquisition (570,664 ) -  
Additions to property, plant and equipment (195,905 ) (873,752 )
Additions to intangible assets (226,752 ) (520,211 )
Proceeds from disposal of property, plant and equipment 400   524,600  
Research and development tax credits 18,536   -  
Other receivables -   (196,954 )
Cash used in investing activities (974,385 ) (1,066,317 )
Financing activities        
Demand loan 1,000,000   -  
         
Cash received in financing activities 1,000,000   -  
         
Net increase (decrease) in cash from continuing activities 893,256   (1,773,159 )
Net (decrease) in cash from discontinued activities        
  Operating activities (219,621 ) (1,970,623 )
  Investing activities -   (131,851 )
  (219,621 ) (2,102,474 )
         
Net increase (decrease) in cash during the period 673,635   (3,875,633 )
Cash at the beginning of the year 2,262,821   6,138,454  
Cash at the end of the year 2,936,456   2,262,821  

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

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