OraSure Technologies, Inc. (Nasdaq:OSUR), a market leader in oral fluid diagnostics, today announced revenues of $75.0 million and $18.8 million for the year and quarter ended December 31, 2010, respectively. This compares to revenues of $77.0 million and $20.9 million for the year and quarter ended December 31, 2009.
The Company recorded a net loss of $3.5 million, or $0.08 per share, and $1.0 million, or $0.02 per share, for the year and quarter ended December 31, 2010, respectively. This compares to a net loss of $7.8 million, or $0.17 per share, and $2.8 million, or $0.06 per share, for the year and quarter ended December 31, 2009, respectively. Fourth quarter and full year 2009 results include $1.5 million in pre-tax litigation settlement expense. Also included in the full year 2009 results is a $3.0 million pre-tax impairment charge related to the net book value of payments previously capitalized under an HCV patent license agreement.
"We exceeded our fourth quarter guidance on both the top and bottom lines and are pleased to have ended 2010 on a strong note," said Douglas A. Michels, President and CEO of OraSure Technologies. "During this past year, we also made good progress advancing our clinical programs, most notably with the receipt of a venous whole blood approval and the FDA submission for a finger stick whole blood claim for our OraQuick® HCV test. We also initiated the final clinical study phase for our at-home HIV test and expanded our infectious disease portfolio by acquiring rights to a rapid flu test. I believe OraSure is very well positioned to begin 2011."
For the year ended December 31, 2010, revenues decreased 3% compared to the year ended December 31, 2009, primarily as a result of lower sales of infectious disease products partially offset by an increase in sales of the Company's cryosurgical systems products and an increase in licensing and product development revenues. The decrease in the Company's infectious disease revenues was largely due to lower international sales. This decrease was offset by higher sales of the Company's Histofreezer® cryosurgical product to physician offices in the United States. Current year licensing and product development revenue includes $2.0 million in milestone payments received under the terms of a collaboration agreement for the development and promotion of the Company's OraQuick® rapid HCV test.
For the quarter ended December 31, 2010, revenues decreased 10% compared to the quarter ended December 31, 2009, primarily as a result of lower sales of infectious disease products in the international marketplace and lower cryosurgical systems sales primarily due to the absence in the current quarter of stocking orders associated with the launch of the Company's over-the-counter ("OTC") cryosurgical product in Brazil.
The Company's gross margin was 63% and 64% for the year and quarter ended December 31, 2010, respectively. This compares to gross margin of 61% for the full year 2009 and 59% for the quarter ended December 31, 2009. Full year 2010 gross margin increased largely as a result of the receipt of $2.0 million in milestone payments under the Company's HCV collaboration agreement with Merck. Gross margin in the fourth quarter of 2010 benefited from a reduction in royalty expense related to the Company's OraQuick® HIV product.
Operating expenses for the year ended December 31, 2010 were $50.7 million, a $5.2 million decrease from the $55.9 million reported in 2009. Prior year results include the $3.0 million impairment charge and $1.5 million litigation settlement expense mentioned above. Research and development costs were comparable year over year at $13.2 million and $13.4 million for 2010 and 2009, respectively. Sales and marketing expenses decreased slightly from $21.2 million in 2009 to $20.7 million in 2010 primarily due to lower relocation expenses. General and administrative costs remained relatively unchanged at $16.8 million in each year.
Fourth quarter operating expenses decreased $2.9 million from $15.8 million in 2009 to $12.9 million in the fourth quarter of 2010. Fourth quarter 2009 expenses included the $1.5 million litigation settlement expense mentioned above. Research and development expenses for the fourth quarter of 2010 decreased approximately $613,000 from the comparable period in 2009 as lower clinical trial expenses related to the Company's OraQuick® HCV test were partially offset by higher costs related to the clinical development of the Company's OraQuick® HIV OTC test. Sales and marketing expenses decreased approximately $854,000 in the fourth quarter of 2010 primarily as a result of lower market research and travel costs. General and administrative expenses for the fourth quarter of 2010 remained flat at approximately $4.0 million compared to $3.9 million for the fourth quarter of 2009.
In the full year and the fourth quarter of 2009, the Company recorded an income tax benefit of $622,000, primarily related to refundable alternative minimum taxes paid in previous years.
Cash, cash equivalents and short-term investments totaled $75.7 million and working capital was $77.8 million at December 31, 2010, compared to $79.7 million and $89.4 million, respectively, at December 31, 2009. This change in working capital reflects the reclassification of the Company's remaining unpaid principal balance of its debt obligation to a current liability as a result of its maturity in June 2011 as well as the reduction of cash, cash equivalents and short-term investments. Cash flow provided by operating activities for the year ended December 31, 2010 was $3.9 million compared to $293,000 used in operating activities for the year ended December 31, 2009.
First Quarter 2011 Outlook
The Company expects total revenues for the first quarter of 2011 to range from approximately $16.75 million to $17.25 million and is projecting a net loss per share for the first quarter of 2011 of approximately $0.08.
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