Immunotec Inc.
TSX VENTURE : IMM

Immunotec Inc.

February 20, 2012 16:51 ET

Immunotec Provides Corporate Update and Year End Financial Results

VAUDREUIL-DORION, QUEBEC--(Marketwire - Feb. 20, 2012) - Immunotec Inc. (TSX VENTURE:IMM), a Canadian based company and a leader in the wellness industry (the "Company"), today is pleased to provide the following update.

"This past fiscal year has seen Immunotec undergo significant changes and the Company continues to make progress in meeting its planned objectives. Immunotec's new sales and marketing team is moving quickly to aggressively expand our presence in Mexico while recovering from lost market share in both Canada and US during the recession" said Bob Henry, Immunotec's Chairman and CEO.

In May 2010, we announced that Immunotec had completed the acquisition of certain assets of a licensee of the Company in Mexico, in connection with the distribution of the Company's products in the Mexican territory. During Fiscal 2011, we recorded sales from Mexico of $8.9M compared to $1.6M representing an increase of $7.3 in twelve months. As a result, we are adding offices and infrastructure to support this growth directly in Mexico City.

Financial results for its year ended October 31, 2011 are as follows: Network sales reached $37.4M in 2011 compared to $34.5M for the same period in 2010, an increase of 8.5% or $2.9M. Other revenues which include revenues of products sold to licensees, freight and shipping, charge backs and educational material purchased by our network, reached $5.5M in 2011, a small decrease of $0.4M compared to $5.9M for the same period in 2010.

Margins before expenses, as a percentage of net sales, decreased in 2011 to 29% compared to 31% for year 2010 and primarily attributed to increases in Sales incentives paid which average a payout rate of 51.0%, compared to the 47.7% level in 2010.The increase in sales incentives is predominantly caused by strong recruitment in the Mexican territory.

Operating expenses reached $11.9M and remained very similar to the prior year at $12.0M and saw an improvement in terms of percentage of revenues representing 28% in 2011 compared with 30% in 2010.

Sales and marketing expenses were $4.6M compared to $4.4M in the prior year. Over the past year management made substantial changes to the sales and marketing organizational structure. We have developed new marketing initiatives by increasing the numbers of weekly meetings across North America and providing additional field training and support programs for the Network. This effort is focused toward increasing the company's customer and distributors' base in all key markets.

For the year ended October 31, 2011, adjusted EBITDA was almost the same has the year before reaching $724 thousand, compared to $774 thousand for Fiscal 2010.

Net loss and comprehensive loss totalled $1,1M for the year ending October 31, 2011, compared to a loss of $1.4M for 2010. The total basic and fully diluted loss per share for Fiscal 2011 was $0.016 compared with fully a diluted loss $0.020 for the same period in Fiscal 2010. This variation for the 2011 period resulted primarily from:

  1. Strong revenue growth in Mexico, mitigating decrease in both Canada and the US.
  2. Increase in sales incentives payout during the year, reducing margins as a result of strong recruitment in Mexico.
  3. The reorganization of its overhead structure in the first quarter.

The Company's Board of Directors announced today that Immunotec has entered into a 3 year employment agreement with Mr. Henry whereby he will continue to lead the Company as Chairman and CEO.

"I am looking forward to spending the next few years working with the field associates and the corporate team in taking this business to the next level" said Bob Henry. "I am excited about this opportunity and believe all of us have a great future together"

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

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, 2011 2010
$ $
ASSETS
Current assets
Cash 2,561,969 2,936,456
Accounts receivable 659,004 782,557
Inventories 3,326,349 2,605,371
Prepaid expenses 401,170 382,794
Future income taxes 270,592 103,099
7,219,084 6,810,277
Non-current assets
Property, plant and equipment 5,304,796 5,674,090
Intangible assets 2,008,000 2,456,651
Goodwill 833,559 833,559
Future income taxes 2,694,604 2,382,148
Other asset 337,971 484,349
18,398,014 18,641,074
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Demand loan - 1,000,000
Accounts payable 935,800 1,593,697
Accrued liabilities 3,136,168 2,707,076
Customer deposits 288,192 274,051
Income taxes payable 58,576 2,041
Current portion of long-term debt 312,320 147,218
4,731,056 5,724,083
Long-term debt 2,077,787 239,622
6,808,843 5,963,705
Shareholders ' equity
Share capital 3,465,548 3,465,548
Other equity - Stock options 1,921,288 1,907,584
Contributed surplus 11,337,796 11,337,796
Deficit (5,135,461 ) (4,033,559 )
11,589,171 12,677,369
18,398,014 18,641,074
Consolidated Statements of Changes in Shareholders' Equity
For the years ended October 31, 2011 and 2010
Number of
common
shares

Share
capital
Other equity
- Stock
options

Contributed
surplus


Deficit


Total
$ $ $ $ $
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
Net loss - - - - (1,101,902 ) (1,101,902 )
Stock-based compensation - - 13,704 - - 13,704
Balance - October 31, 2011 69,994,300 3,465,548 1,921,288 11,337,796 (5,135,461 ) 11,589,171
Consolidated Statements of Loss and Comprehensive Loss
For the years ended October 31, 2011 2010
$ $
Revenues
Network sales 37,396,889 34,453,216
Other revenue 5,523,390 5,888,000
42,920,279 40,341,216
Variable costs
Cost of goods sold 7,586,959 7,729,873
Sales incentives - Network 19,060,065 16,444,572
Other variable costs 3,810,679 3,654,375
Margin before expenses 12,462,576 12,512,396
Expenses
Administrative 6,403,079 6,403,627
Marketing and selling 4,551,532 4,400,073
Quality and development costs 905,113 1,182,394
Amortization 1,170,259 1,193,102
Other 836,523 828,270
Financing income (121,294 ) -
Financing expenses 155,610 -
13,900,822 14,007,466
Loss from continuing operations before
income taxes (1,438,246 ) (1,495,070 )
Income taxes (recovery)
Current 93,605 98,180
Future (479,949 ) (425,711 )
Loss from continuing operations (1,051,902 ) (1,167,539 )
Loss from discontinued operations (50,000 ) (219,621 )
Net loss and comprehensive loss (1,101,902 ) (1,387,160 )
Basic and diluted net loss per share
Continuing operations (0.015 ) (0.017 )
Discontinued operations (0.001 ) (0.003 )
Total basic and diluted net loss per share (0.016 ) (0.020 )
Weighted average number of common shares outstanding during the year
Basic and diluted 69,994,300 69,994,300
Consolidated Statement of Cash Flows
For the years ended October 31, 2011 2010
$ $
Operating activities
Net loss (1,101,902 ) (1,387,160 )
Loss from discontinued operations (50,000 ) (219,621 )
Loss from continuing operations (1,051,902 ) (1,167,539 )
Add (deduct) non-cash items:
Amortization of property, plant and equipment 540,586 596,468
Amortization of intangible assets 629,673 596,634
Other receivables - 196,954
Gain on settlement of contingent consideration liability (64,344 ) -
Gain on change in fair value of contingent consideration liability (56,950 ) -
Unrealized foreign exchange (8,149 ) -
Accreted interest 51,720 -
Future income taxes (479,949 ) (425,711 )
Stock-based compensation 13,704 137,491
Cash received prior to working capital variation (425,611 ) (65,703 )
Net change in non-cash working capital (note 20) (790,963 ) 932,870
Cash (used in) provided by operating activities (1,216,574 ) 867,167
Investing activities
Business acquisition - (570,664 )
Additions to property, plant and equipment (171,292 ) (195,031 )
Additions to intangible assets (163,989 ) (226,752 )
Research and development tax credits 146,378 18,536
Cash used in investing activities (188,903 ) (973,911 )
Financing activities
Long-term debt 2,200,000 -
Demand loan - 1,000,000
Reimbursement of long-term debt (9,233 ) -
Reimbursement of demand loan (1,000,000 ) -
Reimbursement of contingent consideration liability (109,777 ) -
Cash provided by financing activities 1,080,990 1,000,000
Net (decrease) increase in cash from continuing operations (324,487 ) 893,256
Net decrease in cash from discontinued operations (50,000 ) (219,621 )
Net (decrease) increase in cash during the year (374,487 ) 673,635
Cash at the beginning of the year 2,936,456 2,262,821
Cash at the end of the year 2,561,969 2,936,456

Contact Information

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