Immunotec Inc.
TSX CROISSANCE : IMM
TSX VENTURE : IMM

Immunotec Inc.

March 25, 2009 23:59 ET

Record sales increase of 16.9 % for Immunotec Inc. in its first quarter

VAUDREUIL-DORION, QC, March 25 - IMMUNOTEC INC. (TSX Venture
Exchange: IMM) (the "Company" or "Immunotec"), is engaged primarily in the
development, manufacturing and marketing of health and wellness products which
are classified as dietary supplements or natural health products. These
products are distributed and sold in Canada, the United States and Korea
through a network marketing system and in other countries under exclusive
distributorship agreements.

NET SALES

During the first quarter ending January 31, 2009, the Company realized
net sales of $10,103,598 compared to $8,644,415 in 2008, an increase of
$1,459,183 or 16.9%. This mainly reflects increases in net sales in Canada of
$381,019 or 8.3%, in the United States of $1,207,110 or 36.6% and a decrease
of ($128,946) or (16.5%) in sales to other countries. In US dollars, network
sales in the United States were $3,570,342 compared to $3,190,488 in 2008, an
increase of $379,854 or 11.9%.


SELECTED CONSOLIDATED ANNUAL INFORMATION

Q1 Q1
January 31, January 31,
2009 2008
($) ($)
unaudited unaudited
------------- -------------

Net Sales 10,103,598 8,644,415
Cost of Sales 1,773,528 1,639,607
Sales Incentives 4,489,928 3,542,210
Selling, General and
Administrative 4,078,772 2,897,508
(Loss) Earnings before
income taxes (238,630) 565,090
Net (Loss) Earnings (201,205) 311,061
Net (Loss) Earnings per share:
Basic (0.003) 0.004
Diluted (0.003) 0.004
Weighted average number of common
shares outstanding:
Basic 69,994,300 69,994,300
Diluted 69,994,300 69,994,300


As at As at
January 31, October 31,
2009 2008
($) ($)
unaudited audited
------------- -------------

ASSETS:
-------
Cash and equivalents 5,693,766 6,138,454
Accounts receivable 656,550 812,914
Other current Assets 5,998,319 4,683,255
------------- -------------
Total current Assets 12,348,635 11,634,623
------------- -------------

Other Assets 10,990,289 11,028,777
------------- -------------

TOTAL ASSETS 23,338,924 22,663,400
---------- ----------
---------- ----------
LIABILITIES:
------------
Current Liabilities 5,306,600 4,552,187
------------- -------------
TOTAL LIABILITIES 5,306,600 4,552,187
--------- ---------
--------- ---------
SHAREHOLDERS' EQUITY:
---------------------
Share Capital 3,465,548 3,465,548
Other Equity-Stock Options 1,537,201 1,414,885
Contributed surplus 11,332,143 11,332,143
Retained Earnings 1,697,432 1,898,637
------------- -------------

TOTAL SHAREHOLDERS' EQUITY 18,032,324 18,111,213
---------- ----------
---------- ----------

OPERATING RESULTS

The operating results of the Company are a direct result of certain key
performance indicators of which the most important are the number of new
distributors and new customers. The critical indicators not only affect
current performance but are indicative of future performance. New distributors
are independent contractors that purchase a distributor kit and agree to
market the products of the Company to their circle of acquaintances. New
customers are those who agree to purchase the products of the Company on a
regular basis through an auto ship program called ImmunoDirect. For the first
quarter 2009, the number of new distributors recruited into the business
opportunity increased by 127% and the number of new customers remained
essentially flat with the prior year. The increase in the number of new
distributors reflects the emphasis on acquiring distributors versus customers
as their average monthly purchase pattern is approximately 50% greater than a
customer.

SALES INCENTIVES

Sales incentives were 44.4% of net sales for the three-month period ended
January 31, 2009 compared to 41.0% of net sales for the corresponding period
of 2008. The increase in sales incentives resulted from additional monthly
promotions used in the recruiting of new independent distributors which is a
key strategy in realizing the Company's sales objectives.

SELLING, GENERAL AND ADMINISTRATIVE

For the three-month period ended January 31, 2009, selling, general and
administrative expenses were $4,078,772 compared to $2,897,508 for the
corresponding period of 2008, representing an increase of $1,181,264 or 40.8%.
This increase is largely attributable to the increase in salaries and related
expenses of $506,687 resulting from the hiring of sales and marketing
personnel as well as new executives, the provision for the spring incentive
trip of $410,577 and the increase in credit card fees due to the increase in
sales.

FINANCIAL SITUATION AND LIQUIDITY

As at January 31, 2009, the Company had a cash position of $5,693,766
compared to $4,859,061 as at January 31, 2008. The Company believes that cash
requirements in the ordinary course of business for next year can be met with
its available cash, cash generated from its operating activities and the
reduction of income tax payments caused by the realization of prior years
income tax losses. If required, the Company has access to operating credit
facilities of $2,000,000 at its bank's prime rate plus 1/2 %. The credit
facilities have not been drawn upon to date.
As at January 31, 2009, the Company showed a working capital of
$7,042,035 for a ratio of 2.33 compared to a working capital of $5,296,447
with a ratio of 2.38 as at January 31, 2008.

INTERNATIONAL

The Company has for many years exported products internationally under
exclusive distribution agreements based on geographic territories. In the year
ended October 31, 2008, distribution agreements were entered into with
companies in Malaysia, Ecuador and Poland.
Going forward, the Company has made a strategic decision to expand
internationally using the same seamless network marketing model successfully
employed in North America. The first venture in this strategic approach was
the commencement of operations in South Korea on March 20th through a wholly
owned subsidiary, Immunotec (Korea) Inc. The corporate head office of this
subsidiary is located in the city of Seoul and a satellite office is located
in the city of Busan. In the first day of operation in Korea more than 1000
distributors joined the company there.
In addition, Immunotec has formed a wholly owned subsidiary called
Immunotec International Healthcare Products Limited located in Dublin, Ireland
with the intent of beginning operations in the Republic of Ireland and the
United Kingdom in the late Spring.

OUTLOOK

In spite of difficult economic conditions in North America as well as the
rest of the world, we have gained significant positive momentum in the first
quarter. Our network is now excited about the business opportunity. We are
extremely gratified with our significant growth in sales, more than doubling
recruiting of new distributors and the dramatic growth in the number of new
leaders who have developed in both the U.S. and Canada. We have incurred
significant expenses in both infrastructure and promotional expenses to
achieve this turnaround, and growth during the last three months. These
expenses were designed to refocus our distributors on recruiting and to
provide increased marketing and sales support to build a foundation for long
term growth. Now that we have achieved strong positive momentum and introduced
our new compensation plan which intrinsically reinforces key recruiting and
leadership development initiatives, we will begin scaling back the promotional
expenses.
Although gratified with the sales performance in the first quarter we are
not satisfied with the profit result. It is our intention to continue to grow
the revenue of the Company in the coming quarters and better leverage the
investments we have made in human capital and infrastructure to improve our
bottom line results.
Additionally, the investment we have made to expand our network
internationally on a seamless basis as well as the launching of our new
compensation plan for our distributors should begin to bear fruit during the
remaining three quarters of this year.

FORWARD LOOKING STATEMENTS

Some statements included in this management report contain
forward-looking information about the Company's future financial positions,
operating results and sales. They may be based on market expectations,
management opinions and assumptions. Such information involves significant
risks and uncertainties that are difficult to predict and rely on assumptions
that may prove inaccurate. Actual results and events may differ materially
from these forward-looking statements.

ABOUT IMMUNOTEC

Immunotec is located in a 37,000 square foot facility located in
Vaudreuil-Dorion, Quebec, Canada and also has a manufacturing facility located
in Blainville, Quebec, Canada and a distribution centre located in Swanton,
Vermont, USA. Immunotec is engaged primarily in the development and marketing
of natural health products, dietary supplements, food, vitamins and personal
care products, and natural health products, some of which are manufactured on
its behalf by third parties. Immunotec's products are distributed and sold in
Canada, the United States and Korea through a network marketing system and in
other countries under exclusive distributorship agreements.
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.

Contact Information

  • Richard Patte, CA, Executive Vice-President and Chief Financial Officer, (450) 510-4445