MEDTOX Scientific third quarter total revenues increase 15.9% to $25.8 million

MEDTOX Scientific, Inc. (Nasdaq:MTOX) today announced results for the third quarter ended September 30, 2010. MEDTOX achieved record revenues and gross profit in the quarter. Highlights from the quarter compared to the prior-year period include:

• Total revenues increased 15.9% to $25.8 million
• Gross profit increased 24.5% to $10.8 million
• Operating income increased 75.9% to $1.8 million
• Net income increased 51.5% to $1.1 million
• Earnings per diluted share were $0.13 compared to $0.09 in the prior-year period

In our Laboratory segment, revenues from drugs-of-abuse testing in the quarter increased 9.8%, to $10.4 million, from $9.5 million in the prior-year period.  The increase is a result of more stable testing volumes from our existing workplace clients and an increase in revenues from new clients. Our clinical laboratory diversification efforts initiated in 2008 continues to gain momentum with clinical laboratory revenues increasing 28.1% to $7.9 million, compared to $6.2 million for the prior-year period. Clinical Trial Services revenues increased 17.8% to $2.4 million for the quarter, compared to $2.0 million for the prior-year period. 

In the Diagnostic segment, revenues were up 11.2% for the quarter. The increase is attributable to strong sales in the workplace drugs-of-abuse market with our Profile®-II A and Profile®-III A products, and increased sales of Profile®-V sold into the hospital market with our MEDTOXScan® Reader.

Revenue increases in Drug Testing, Clinical Laboratory and Diagnostic Product Sales validate our strategy of adding to our sales group, expanding clinical laboratory capabilities, and continued pursuit of market share gains in the drugs-of-abuse testing market.          

Gross profit for the three-month period ended September 30, 2010, increased to a quarterly record of $10.8 million, up $2.1 million or 24.5% from the prior period. Gross margins improved in both the Laboratory Services and Diagnostic Products segments with overall gross margin increasing 290 basis points to 41.9%, compared to 39.0% in the third quarter of 2009.

The Company recorded operating income of $1.8 million for the three-month period, compared to $1.0 million for the prior-year period. Net income for the quarter increased $390,000 to $1.1 million, or 51.5% compared to the prior year period. Diluted earnings per share for the quarter were $0.13, compared to $0.09 in the third quarter of 2009. 

For the nine-month period ended September 30, 2010, revenues were $72.1 million, compared to $64.3 million for the prior-year period. Operating income was $3.5 million, compared to $2.5 million for the prior-year period. The Company recorded net income of $2.2 million, compared to $1.5 million for the prior-year period. Earnings per diluted share were $0.25, compared to $0.17 for the prior-year period.

Cash on hand at quarter end was $4.8 million and the Company has no long term debt.