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Akers Biosciences, Inc. Reports Its Second Quarter Financial Results



8/12/2014 8:04:20 AM

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Sales of flagship PIFA Heparin/PF4 products increasing

Conference call scheduled for 10:15 a.m. ET today

THOROFARE, N.J., Aug. 12, 2014 (GLOBE NEWSWIRE) -- Akers Biosciences, Inc. (Nasdaq:AKER) (AIM:AKR.L), (the "Company" or "ABI"), a leading designer and manufacturer of rapid diagnostic screening and testing products, reports its financial results for the second quarter and six months ended June 30, 2014.

Financial Highlights:

  • Revenue for the three months ended June 30, 2014 increased 26% to $1,353,156, compared to $1,076,365 for the same period of 2013
  • Sales of flagship PIFA Heparin/PF4 products increased 13% to $333,608, compared to $296,375 for the same period of 2013
  • Working capital increased to $14,267,869 as of June 30, 2014 as compared to $1,005,117 at June 30, 2013
  • EBITDA for the three months ended June 30, 2014 was a loss of $427,182 compared to a loss of $173,070 for the same period of 2013

Operational Highlights:

  • Completed IPO on NASDAQ Capital Market in January 2014, raising approximately $15 million in gross proceeds
  • US distribution agreements signed for PIFA Heparin/PF4 products with Medline and Typenex
  • PIFA Heparin/PF4 products are now being marketed by the three largest distributors of healthcare supplies in the United States
  • Expansion of internal sales organization under the leadership of recently appointed Executive Vice President, Sales and Marketing, Edwin C. Hendrick
  • Major advancements in international sales strategy with multi-product distribution agreements signed for territories including India, the Middle East, Australia and Singapore
  • Commenced Clinical Trials for PIFA PLUSS Chlamydia Assay

"We are very encouraged by the continuing upward trajectory of sales of our flagship PIFA Heparin/PF4 products; and we are yet to see meaningful contributions from recent additional distribution channels established for this product during the first half," commented Raymond F. Akers Jr., Ph.D, Executive Chairman.

"As well as accelerating the development process of our product pipeline, the NASDAQ listing has allowed us to add significant weight to our sales and marketing strategy, with Edwin Hendrick now leading our domestic sales and marketing effort and the very recently appointed Nicolas Daurel spearheading international expansion, through the identification of key distribution partners," continued Dr. Akers. "We are looking forward to continuing growth of PIFA Heparin/PF4 product sales in the second half, while opening new channels for this – and other – commercialized tests."

ABI's total revenue for the three months ended June 30, 2014 was $1,353,156, a 26% increase from the same period in 2013. Product revenue totaled $1,269,823 (2013: $993,032) while the Company's license fee revenue remained unchanged, totaling $83,333 for the periods ended June 30, 2014 and 2013.

Cost of sales for the three months ended June 30, 2014 decreased by 78% compared to the same period in 2013 to $141,408 from $633,022 in 2013. Direct cost of sales declined to 3% and indirect cost of sales declined to 8% of product revenue for the three months ended June 30, 2014 as compared to 46% and 17% for the same period in 2013. Overall, cost of sales, as a percentage of product revenue, was 11% and 63% for the three month periods ended June 30, 2014 and 2013.

ABI's gross profit margin, as a percentage of total revenue, improved to 89% for the three months ended June 30, 2014 as compared to 41% in 2013. The primary factor in this improvement was the Company's removal of the REA products from inventory in prior periods. As a result, there was no significant cost of inventory associated with the REA product sales in the period. The gross profit margin is not therefore expected to remain at this level. A decrease in indirect cost of sales attributable to decreases in shipping expenses, repairs and maintenance of equipment, and manufacturing supplies also contributed to the improved gross profit margin.

General and administrative expenses for the three months ended June 30, 2014, totaled $1,017,047 (2013: $381,011). The increase is related to personnel, professional services, stock market and investor relations activities, travel and the issuance of stock options for Directors and Officers.

The increases in professional services and stock market and investor relations activities are directly related to the maintenance of our stock listings in the United States (NASDAQ) and Great Britain (London Stock Exchange). The dual listing requires us to maintain public relations, stock registrars, nominated advisors and legal counsel for both markets and requires additional accounting services to insure compliance with regulators.

Sales and marketing expenses for the three months ended June 30, 2014 totaled $396,609 (2013: $176,101). The increase was the result of general consulting services and the issuance of stock options for key employees. The general consulting fees are for the development of sales and marketing programs and the exploration of governmental opportunities and additional international markets for our products.

The Company's dedicated technical sales account executives have moved away from a direct selling model to one that works in tandem with over 300 sales representatives of ABI's US distribution partners, Cardinal Health, Medline Industries and Fisher HealthCare. The relationship with Medline began this quarter and sales have yet to commence. In addition, the PIFA PLUSS assay was just added to Fisher's distribution agreement in January of 2014; this expansion and relationship-building initiative has already delivered a measureable increase in product trials and adoptions.

The Company also entered into a telesales agreement on June 8, 2014 with Typenex Medical, a world leader in blood banking products for safety and streamlining processes and chain of custody. Their relationship within the hospital hematology department uniquely allows them access the Company's target market. They are now selling PIFA products into the market via their seasoned telesales group, specifically focused on PIFA PLUSS. This allows the Company to better reach the total market in the most cost effective commercial approach.

For the three months ended June 30, 2014, the Company generated a net loss of $494,995. The loss is attributable to the increased costs for professional services related to regulatory compliance and reporting associated with the dual market listings, expansion of our sales and marketing efforts and compensation of our directors, officers and key employees through stock options.

Earnings before interest, depreciation, taxes and amortization was a loss of $427,182 for the three months ended June 30, 2014.

"We are highly focused on expanding distribution of our flagship PIFA Heparin/PF4 rapid assays, which are now being marketed by the three largest distributors of healthcare supplies in the United States," added Dr. Akers. "In addition to the ongoing upscaling of domestic sales and marketing capacity, we are committed to building international sales of our diagnostic assays in markets where existing tests do not effectively fulfill clinical requirements or where an emerging unfulfilled need for certain tests has been identified. In particular, we have identified opportunities in the near-term for international sales of our PIFA Heparin/PF4 Rapid Assays, PIFA Infectious Disease Rapid Assays and Tri-Cholesterol "Check"; and we continue to support Chubeworkx's international marketing of its CHUBE private-labeled breath alcohol detectors to additional markets.

Dr. Akers continued, "We have also begun to step up initial commercialization activities for METRON and VIVO. Our next wave of products are already in the development pipeline, and include our PIFA PLUSS® Infectious Disease single-use assays, Breath Ketone "Check", and Breath PulmoHealth "Check" products for asthma, chronic obstructive pulmonary disease and lung cancer. The funds raised in our IPO earlier this year are enabling us to accelerate the development of these products and their regulatory approvals around the world. These products have the capability to address very substantial diagnostic markets."

Conference Call Information:

Tuesday, August 12, 2014 at 10:30 a.m. Eastern time
Domestic: 1-888-256-9022
International: 1-913-312-1495
Conference ID: 7202108
Webcast: http://ir.akersbiosciences.com/events.cfm
Replays - Available through August 26, 2014
Domestic: 1-877-870-5176
International: 1-858-384-5517
Conference ID: 7202108

ABOUT AKERS BIOSCIENCES, INC.

Akers Biosciences develops, manufactures, and supplies rapid, point of care screening and testing products designed to bring healthcare information both rapidly and directly to the consumer or healthcare provider. The Company has advanced the science of diagnostics while responding to major shifts in healthcare through the development of several proprietary platform technologies. The Company's state-of-the-art rapid diagnostic assays can be performed virtually anywhere in minutes when time is of the essence. The Company has aligned with major healthcare companies and high volume medical products distributors to maximize product offerings, and to be a major worldwide competitor in diagnostics.

Additional information on the Company and its products can be found on our website at www.akersbiosciences.com. Follow us on Twitter @AkersBio.

Cautionary Statement Regarding Forward Looking Statements

Statements contained herein that are not based upon current or historical fact are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements reflect the Company's expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties. These statements include but are not limited to statements regarding the intended terms of the offering, closing of the offering and use of any proceeds from the offering. When used herein, the words "anticipate," "believe," "estimate," "upcoming," "plan," "target", "intend" and "expect" and similar expressions, as they relate to Akers Biosciences, Inc., its subsidiaries, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company's actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

CONTACT: Raymond F. Akers, Jr. PhD Executive Chairman Akers Biosciences, Inc. Tel. +1 856 848 8698 Brendan Hopkins RedChip Companies, Inc. (US Investor Relations) Tel. +1 407 644 4256 x134 Emma Earl Daniel Stewart (Nomad and Broker) Tel. +44 (0) 20 7776 6550 Ben Simons / Alexandra Roper Vigo Communications (UK Investor Relations) Tel. +44 (0) 20 7016 9570 akers@vigocomms.com

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