CANTON, Mass., Jan. 25 /PRNewswire-FirstCall/ -- Avitar, Inc. today announced financial results for the three and 12 months ended September 30, 2005. As reported in the Form 8-K filed by the Company on January 25, 2006, the statements of stockholders’ deficit as of September 30, 2003 and 2004 and for the year ended September 30, 2004 and the statement of operations for the year ended September 30, 2004 contained in the Company’s Annual Report on Form 10-KSB filed on January 25, 2006 were restated to correct the error in accounting for the issuance of various securities and the derivative features embedded therein.
For the year ended September 30, 2005, Avitar reported revenues of $4,509,000 from continuing operations compared to $4,049,000 from continuing operations for the year ended September 30, 2004. The net loss was $2,433,000, or $0.03 a share, for the year ended September 30, 2005 compared with net loss of $2,412,000, or $0.04 a share for the year ended September 30, 2004. The net loss for Fiscal 2005 reflects increases in operating costs of $1,657,000 related primarily to increased cost of sales associated with higher revenues, the continuation of the Company’s enhanced ORALscreen(R) sales and marketing program that began in the latter part of Fiscal 2004 and goodwill impairment for the BJR Security acquisition; offset in part by increases in revenues of $460.000 and other non-cash income of $1,061,000 resulting from changes in fair market value of derivative securities and warrants and decreases in interest expense and financing costs of $96,000.
Revenues from continuing operations for the fourth quarter of fiscal 2005 were $1,285,000 compared to $1,244,000 from continuing operations in the prior year’s fourth fiscal quarter ended September 30, 2004. The net loss was $345,000, or $0.00 per share, for the quarter ended September 30, 2005 compared with net loss of $488,000, or $0.00 per share, for the quarter ended September 30, 2004. The net loss for the quarter ended September 30, 2005 reflected increases in interest and financing costs of $97,000, increases in operating expenses of $75,000 and goodwill impairment of $100,000 for the BJR Security Acquisition from the quarter ended September 30, 2004; offset by increases in revenues of $41,000 and other non-cash income of $374,000 resulting from changes in fair market value of derivative securities and warrants.
Peter P. Phildius, Chairman and CEO commented, “The $140 billion of costs incurred annually by U.S. industry due to drug use by employees is an enormous unaddressed problem for which our technology offers the most viable solution. As the first mover in this space, our challenge has been, and continues to be, to communicate our compelling value proposition to the marketplace. During Fiscal 2005 we have made significant strides in this effort.”
Mr. Phildius continued, “Through a series of marketing initiatives including webinars, internet based marketing programs, and journal articles, to name a few, we have been able to enhance the awareness and acceptability of oral fluid technology. We are expanding our direct sales organization and are securing additional channel partners, both in the U.S. and internationally, to increase our market penetration. In addition, we continue to develop additional product offerings, including a lab-based oral test, as well as initiating development of software solutions, to more fully offer our customers the total business solution for their employee drug use problem.”
ABOUT AVITAR
Avitar, Inc. develops, manufactures and markets innovative and proprietary products in the oral fluid diagnostic market, disease and clinical testing market, and customized polyurethane applications used in the wound dressing industry. Oral fluid diagnostics includes the estimated $1.5 billion drugs- of-abuse testing market, which encompasses the corporate workplace and criminal justice markets. Avitar’s products include ORALscreen(R), the world’s first non-invasive, rapid, onsite oral fluid test for drugs-of-abuse. Additionally, Avitar manufactures and markets HYDRASORB(R), an absorbent topical dressing for moderate to heavy exudating wounds. In the estimated $25 billion in vitro diagnostics market, Avitar is developing diagnostic strategies for disease and clinical testing. Some examples include influenza, diabetes and pregnancy. For more information, see Avitar’s website at http://www.avitarinc.com.
Safe Harbor Statement.
This release contains forward looking statements that are subject to risks and uncertainties including financing risks and the development and marketing of new applications and other risks that are detailed from time to time in the Company’s filings with the Securities and Exchange Commission. In view of such risks and uncertainties, the Company’s actual results could differ materially from those anticipated in such forward looking statements.
Contact Information: Jay C. Leatherman, Jr. Chief Financial Officer Avitar, Inc. 65 Dan Road Canton, MA 02021 781-821-2440 jleatherman@avitarinc.com Avitar, Inc. Summary of Financial Results (in thousands, except per share amounts) Quarter Ended September 30, Year Ended September 30, 2005 2004 2005 2004 Sales $1,285 $1,244 $4,509 $4,049 Operating Expenses: Cost of Sales 842 865 3,183 2,713 Selling, General and Administrative 1,155 1,041 4,329 3,401 Research and Development 163 179 724 565 Goodwill Impairment 100 - 100 - Total Operating Expenses 2,260 2,085 8,336 6,679 Operating Loss (975) (841) (3,827) (2,630) Other Income(Expenses) 630 353 1,394 231 Loss from Continuing Operations Before Discontinued Operations (345) (488) (2,433) (2,399) Discontinued Operations: Income (Loss) from Operations of USDTL - - - 4 Loss from the Disposal of USDTL - - - (17) Loss from Discontinued Operations - - - (13) Net Loss $(345) $(488) $(2,433) $(2,412) Basic and Diluted Loss Per Share From Continuing Operations $- $- $(0.03) $(0.04) Basic and Diluted Net Loss Per Share $- $- $(0.03) $(0.04) Weighted Average Number of Shares and Common Equivalent Shares Outstanding 180,078,483 119,284,704 155,778,681 106,658,715 Selected Balance Sheet Items-9/30/05: Cash $400 Total Assets 2,428 Total Liabilities 3,688 Redeemable Convertible Preferred Stock 3,345 Shareholders’ Equity (4,606)
Avitar, Inc.
CONTACT: Jay C. Leatherman, Jr., Chief Financial Officer of Avitar, Inc.,+1-781-821-2440, jleatherman@avitarinc.com
Web site: http://www.avitarinc.com//
