MEDFORD, NY--(Marketwire - March 05, 2010) - Chembio Diagnostics, Inc. (OTCBB: CEMI), which develops, manufactures, markets and licenses point-of-care diagnostic tests, reported its first yearly profit since its merger in May 2004. Total revenues were $13.83 million for the year ended December 31, 2009, which compares to total revenues of $11.05 million for the year ended December 31, 2008, a 25% increase. The Company recorded net income of approximately $309,000, or less than $0.01 per share, for the year ended December 31, 2009, compared to a net loss of approximately $(1,949,000), or $(0.03) per share, for the year ended December 31, 2008. Total revenues were $3.55 million for the three months ended December 31, 2009, which compares to total revenues of $2.45 million for the three months ended December 31, 2008, a 45% increase. The Company recorded net income of approximately $217,000, or under $0.01 per share, for the three months ended December 31, 2009, compared to a net loss of approximately $550,000, or $0.01 per share, for the three months ended December 31, 2008.
The operating results in 2009 include $5.24 million of revenues from the sale of rapid HIV tests to Inverness Medical Innovations, Inc., the Company's exclusive U.S. marketing partner for its two FDA approved rapid HIV tests. This represents an increase of $3.13 million, or 148%, compared to $2.11 million for the year ended December 31, 2008. Sales to Inverness in the fourth quarter of 2009 were $1.83 million, an increase of $1.29 million, or 238%, as compared to the fourth quarter in 2008. The Company also realized a record amount of revenues related to research & development contracts and grants, which increased 93% to $1.34 million in the year ended December 31, 2009 from $694,000 in the year ended December 31 2008. Also included in our 2009 product sales was $619,500 of DPP® product sales, an increase of 392%, or $493,500, as compared to $126,000 in 2008. The 2009 results also reflect significant overhead reductions as compared with the year of 2008 when the Company initiated a series of cost reductions. The Company has nevertheless over the same period increased its research & development expenses, as more products based on the Company's patented DPP® technology were validated for manufacture and entered the clinical evaluation and regulatory approval process.
Commenting on the results, Chembio's President, Lawrence A. Siebert, stated, "We are very pleased with our 2009 results, which included strong growth in our base business of lateral flow HIV tests, and record revenue from research and development contracts and grants, which enabled us to increase our investment in our new DPP product pipeline. I believe we are very well positioned to deliver continued growth in 2010 and beyond, as the growth from our base business is accelerated from the commercialization of our new DPP® rapid, point of care products."
Financial Highlights for 2009
-- Product sales for the year ended December 31, 2009 increased 19.5% to a
record $12.37 million from $10.36 million in 2008, which was the
Company's previous record for revenues. Net product sales to Inverness
for the year increased more than $3.13 million, or approximately 148%,
as compared to the year of 2008.
-- Product sales also included the shipment of HIV rapid tests and
components to customers in Africa ($3.35MM), South America ($2.43MM),
and Asia, Europe, and the Middle East ($.46MM).
-- Also included in our 2009 product sales was $619,500 of DPP® product
sales, an increase of 392%, or $493,500, as compared to $126,000 in
2008. These sales were for three of the four DPP® products we
contracted for in 2008 with our Brazilian customer FIOCRUZ. These sales
all reflect products provided FIOCRUZ to submit product for evaluation,
laboratory and field studies, and regulatory approval. Delays have
occurred in FIOCRUZ obtaining these regulatory approvals, although we
believe that these regulatory approvals will be achieved during the
first and/or second quarters of 2010.
-- The increased product and R&D revenues combined to produce gross margin
dollars that were $2.01 million, or 52%, greater ($5.86 million vs.
$3.85 million) than the gross margin dollars in the comparable period in
2008.
-- Selling General & Administrative Expenses decreased by $658,000, or 20%,
in the year of 2009 as compared to the year of 2008.
-- Operating profit was approximately $317,000 in 2009, as compared to an
operating loss in 2008 of $2.07 million, a swing of $2.39 million. In
addition, net income was approximately $309,000 in 2009 as compared to a
net loss in 2008 of $1,949,000, a swing of $2,258,000.
-- The December 31, 2009 cash balance was $144,000 less than as of December
31, 2008. This was primarily due to $792,000 that was paid to Inverness
pursuant to our agreement of December 2008 in which we agreed to
amortize a $1.01 million liability to Inverness based on a percentage of
their sales of our products beginning in 2009. Based on Inverness'
anticipated sales of our products in 2010, we anticipate that the
liability mentioned above will be fully amortized in the first part of
2010, thereby freeing up this cash flow used to extinguish the
obligation to Inverness for other corporate purposes. Also contributing
to the cash decrease was a $675,000 account receivable balance that was
outstanding at the year end (which amount was paid in January 2010) and
$400,000 that we invested during 2009 in new equipment and facilities
(primarily our new assembly system that we took delivery of in February
2010). Partially offsetting these cash outflows were our net income,
non-cash expenses, and receipt of a $340,000 license fee deposit from
Bio-Rad Laboratories, Inc.
Financial Highlights for the Quarter ended December 31, 2009
-- Product sales for the quarter ended December 31, 2009 (fourth quarter)
increased 39.3% to $3.13 million from $2.24 million in the same period
of 2008. Net product sales to Inverness for the fourth quarter increased
more than $1.29 million to $1.83 million, or approximately 238%, as
compared to $542,000 in the same quarter of 2008.
-- The increased product and R&D revenues in the fourth quarter of 2009
combined to produce gross margin dollars that were $1.02 million, or
165%, greater ($1.63 million vs. $.62 million) than the gross margin
dollars in the comparable period in 2008.
-- Selling General & Administrative Expenses increased by $37,000 or 6% in
the fourth quarter of 2009 as compared to the fourth quarter of 2008.
-- Operating profit was approximately $218,000, in the fourth quarter of
2009 as compared to an operating loss in the fourth quarter of 2008 of
$658,000, a swing of $876,000. In addition, net income was approximately
$217,000 in the fourth quarter of 2009 as compared to a net loss in the
fourth quarter of 2008 of $550,000, a swing of $767,000.
Regulatory Activities
-- Regulatory Approvals in Brazil through the Oswaldo Cruz Foundation
(FIOCRUZ) - We anticipate that FIOCRUZ will receive required approvals
from its regulatory agencies during the first half of 2010 for the
DPP® Leishmaniasis, HIV Confirmatory, and the DPP® HIV screening
tests.
-- DPP® HIV 1/2 Screening Assay for Oral Fluid
-- International Evaluations - Two prospective evaluations in Africa
have been completed of this product with outstanding results. With
this data we are now undertaking to register the product in certain
countries where we believe there is an opportunity to introduce our
unique HIV oral fluid assay.
-- U.S. FDA Pre-Marketing Approval (PMA) Application - We anticipate
commencing the clinical testing in the current quarter in support of
a PMA application.
-- DPP® Syphilis Screen & Confirm - The first phase of a multi-center
evaluation sponsored by the World Health Organization commenced during
the third quarter and we have received only limited first phase results.
-- CE Mark for FDA approved HIV tests - Additional data was requested in
correspondence we received in January. We are evaluating the request.
The table below provides a preliminary summary timetable for the regulatory approval and commercialization of the DPP® HIV Screening Assay and the DPP® Syphilis Screen & Confirm Assay in major markets.
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DPP® HIV 1/2 DPP® Syphilis
Market Screening Assay Screen & Confirm
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Developing World 2010 2010
CE Mark 2nd Half 2011 First Half 2010
US FDA 2nd Half 2011 First Half 2011
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Development Activities
-- Bio-Rad Laboratories OEM DPP® Agreement - We expect to complete
development of this DPP® multiplex product in June of this year, two
months later than the two-year development agreement which we signed in
April 2008 contemplated. Thereupon, activities in support of CE marking
and FDA approval will be initiated by Bio-Rad with Chembio as the OEM
manufacturer.
-- Battelle/CDC DPP® Influenza Immunity Test - In December 2009 Chembio
entered into a milestone-based development agreement for up to
approximately $900,000 in connection with the development and initial
supply of a multiplex, rapid point-of-care ("POC") influenza immunity
test. The agreement contemplates a period of approximately nine months
in which the development activity is to be completed. Chembio entered
this agreement with Battelle Memorial Institute which has a master
contract with the United States Centers for Disease Control and
Prevention ("CDC") to enter into, implement and provide technical
oversight of agreements relating to pandemic preparedness on behalf of
CDC. Our work plan has been delivered and been approved, which are the
first two milestones triggering approximately $178,000 in payments to
Chembio.
-- DPP® Hepatitis C and DPP® Hepatitis C/HIV Oral Fluid Antibody Tests
- Prototypes of these products have been developed and are still being
evaluated in a study that has been organized by the National Center for
HIV/AIDS, Viral Hepatitis, STD, and TB Prevention (NCHHSTP) at the
Centers for Disease Control and Prevention (CDC) of the Department Of
Health and Human Services. The evaluation will be completed during 2010
and the results should be useful in helping to ascertain the performance
characteristics of these products in comparison to other products that
will also be in this evaluation.
-- DPP® Influenza - We have developed a prototype multiplex test for FLU
A/B Antigen Detection. We believe that we can develop a test that
performs better than the current market leaders, and so that there is
therefore a significant opportunity to participate in this market. Our
current plan is for development to be completed and initiation of our
FDA 510(k) submission activities during 2010.
-- DPP® Leptospirosis - In June 2009, as we previously reported, we were
awarded a three-year $3 million Small Business Innovative Research
(SBIR) Phase II grant from the United States National Institutes of
Health (NIH) to fully develop, validate, and commercialize a rapid
diagnostic test for Leptospirosis for general use worldwide, and our
work is progressing on schedule.
-- Other Research & Development Activities - Chembio continues to work with
commercial, governmental and private organizations in order to obtain
R&D contracts & grant funding for development projects. These programs
have subsidized the Company's development expenses while expanding the
applications for and know-how related to DPP® and creating important
collaborative relationships. We have other grant applications pending.
In addition to the specific products we plan to commercialize, we also
are pursuing enhancements to our DPP® technology platform during 2010
and 2011. These enhancements include further simplifying test
procedures, lowering the overall manufacturing costs, enabling
development of combination antibody and antigen assays, and integrating
molecular sample amplification systems with our detection system. We are
active in each of these areas and also are pursuing patent protection
where applicable.
There can be no assurance that any of these projects will continue, meet regulatory or other technical requirements and specifications, and/or that if continued, will result in completed products, or that such products, if successfully completed, will be successfully commercialized.
Conference Call
Chembio has scheduled a conference call and webcast for 10:30 a.m. Eastern time on Friday, March 5, 2010. To participate on the conference call, please dial (877) 407-8214 from the U.S. or (201) 689-7832 from outside the U.S. In addition, following the completion of the call, a telephone replay will be accessible until March 12, 2010 at 11:59 p.m. Eastern Time by dialing (877) 660-6853 from the U.S. or (201) 612-7415 from outside the U.S. and entering reservation account number 286 and conference ID #: 345178. The conference call may also be accessed via the internet at http://www.investorcalendar.com/IC/CEPage.asp?ID=155419. An archive of the webcast will be available for 90 days on the Company's website at www.chembio.com.
About Chembio Diagnostics
Chembio Diagnostics, Inc. develops, manufactures, licenses and markets proprietary rapid diagnostic tests in the growing $7 billion point-of-care testing market. Chembio's two FDA PMA-approved, CLIA-waived, rapid HIV tests are marketed in the U.S. by Inverness Medical Innovations, Inc. Chembio markets its HIV STAT-PAK® line of rapid HIV tests internationally to government and donor-funded programs directly and through distributors. Chembio has developed a patented point-of-care test platform technology, the Dual Path Platform (DPP®) technology, which has significant advantages over lateral-flow technologies. This technology is providing Chembio with a significant pipeline of business opportunities for the development and manufacture of new products based on DPP®. Headquartered in Medford, NY, with approximately 100 employees, Chembio is licensed by the U.S. Food and Drug Administration (FDA) as well as the U.S. Department of Agriculture (USDA), and is certified for the global market under the International Standards Organization (ISO) directive 13.485.
Forward-Looking Statements
Statements contained herein that are not historical facts may be forward-looking statements within the meaning of the Securities Act of 1933, as amended. Forward-looking statements include statements regarding the intent, belief or current expectations of the Company and its management. Such statements are estimates only, as the Company has not completed the preparation of its financial statements for those periods, nor has its auditor completed a review or audit of those results. Actual revenue may differ materially from those anticipated in this press release. Such statements reflect management's current views, are based on certain assumptions and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including, but not limited to Chembio's ability to obtain additional financing, to obtain regulatory approvals in a timely manner and the demand for Chembio's products. Chembio undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in Chembio's expectations with regard to these forward-looking statements or the occurrence of unanticipated events. Factors that may impact Chembio's success are more fully disclosed in Chembio's most recent public filings with the U.S. Securities and Exchange Commission.
(Tables to follow)
Chembio Diagnostics, Inc.
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Summary of Results of Operations
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For the three months
ended (Unaudited) For the years ended
------------------------- -------------------------
December 31, December 31, December 31, December 31,
2009 2008 2009 2008
------------ ------------ ------------ ------------
Net product sales $ 3,127,454 $ 2,244,753 $ 12,372,493 $ 10,355,768
License and royalty
income 38,186 - 121,896 -
Research grant income 385,801 206,141 1,339,859 693,803
------------ ------------ ------------ ------------
Total Revenues $ 3,551,441 $ 2,450,894 $ 13,834,248 $ 11,049,571
Gross Profit $ 1,630,805 $ 615,290 $ 5,860,405 $ 3,851,721
Research and
development expenses $ 755,836 $ 652,906 $ 2,883,696 $ 2,605,343
Selling, general and
administrative
expenses $ 657,310 $ 620,695 $ 2,659,382 $ 3,317,046
Income (loss) from
operations $ 217,659 $ (658,311) $ 317,327 $(2,070,668)
Net income (loss) $ 217,214 $ (550,403) $ 309,060 $(1,948,770)
Basic earnings (loss)
per share $ 0.00 $ (0.01) $ 0.00 $ (0.03)
Diluted earnings
(loss) per share $ 0.00 $ (0.01) $ 0.00 $ (0.03)
Weighted average
number of shares
outstanding, basic 61,950,988 61,944,901 61,946,435 61,266,594
Weighted average
number of shares
outstanding, diluted 75,365,550 61,944,901 75,041,932 61,266,594
Chembio Diagnostics, Inc.
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Summary of Balance Sheets
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December 31, 2009 December 31, 2008
----------------- -----------------
CURRENT ASSETS:
Cash $ 1,068,235 $ 1,212,222
Accounts receivable, net of allowances 1,776,327 809,303
Inventories 1,555,903 1,819,037
Other current assets 266,637 225,153
----------------- -----------------
TOTAL CURRENT ASSETS 4,667,102 4,065,715
NET FIXED ASSETS 580,213 881,406
OTHER ASSETS
Deposits on manufacturing equipment 338,375 -
License agreements and other assets 729,560 967,820
----------------- -----------------
$ 6,315,250 $ 5,914,941
================= =================
TOTAL CURRENT LIABILITIES $ 3,173,132 $ 2,401,801
TOTAL OTHER LIABILITIES 54,204 935,808
----------------- -----------------
TOTAL LIABILITIES 3,227,336 3,337,609
TOTAL STOCKHOLDERS' EQUITY 3,087,914 2,577,332
----------------- -----------------
$ 6,315,250 $ 5,914,941
================= =================
Chembio Diagnostics, Inc.
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Summary of Cash Flow
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For the years ended
-----------------------------------
December 31, 2009 December 31, 2008
----------------- -----------------
Net cash provided by (used in)
operating activities $ 251,927 $ (1,194,227)
Net cash used in investing activities (376,988) (397,462)
Net cash provided by (used in)
financing activities (18,926) (23,458)
-----------------------------------
Net decrease in cash and cash
equivalents $ (143,987) $ (1,615,147)
===================================
Contacts:
Company:
Contact:
Susan Norcott
631-924-1135 x125
snorcott@chembio.com
Investor & Public Relations
The Investor Relations Group
212-825-3210
James Carbonara
JCarbonara@investorrelationsgroup.com
