| Company Contact: | Kevin Clark, CEO, COO and President Telephone: 305-324-2300 | |
| | |
FOR IMMEDIATE RELEASE
IVAX DIAGNOSTICS, INC. REPORTS THIRD QUARTER 2011 FINANCIAL RESULTS
-- Continued Positioning for Growth --
MIAMI, FL, November 14, 2011 -- IVAX Diagnostics, Inc. (NYSE Amex: IVD), a fully integrated in vitro diagnostics company, reports its financial results for the quarter and nine months ended September 30, 2011.
Kevin D. Clark, Chief Executive Officer, Chief Operating Officer and President of IVAX Diagnostics, said, “Our initiatives to reduce expenses while positioning ourselves for expected growth continued during the third quarter of 2011. Our operating expenses for the third quarter of 2011 decreased 5.3% compared to the same period of 2010. During the third quarter of 2011. we continued our strategy of expanding our suite of high-quality, reliable products as well as increasing our global footprint.”
Mr. Clark concluded, “For the remainder of this year, we intend to continue our focus on cost control as we position IVAX Diagnostics for growth in 2012.”
Financial Highlights for the Quarter and Nine Months Ended September 30, 2011
Net revenues for the quarter ended September 30, 2011 were $4,060,000 compared with $3,953,000 in the quarter ended September 30, 2010, an increase of $107,000, or 2.7%. The increase in net revenues during the quarter ended September 30, 2011 compared to the same period of 2010 resulted from an increase of $272,000 in revenue from European operations, offset by a decrease of $165,000 in domestic revenue. European revenues benefited by $118,000 from changes in currency exchange rates. Net revenues for the nine months ended September 30, 2011 were $12,569,000, compared with $13,002,000 in the same period of 2010, a decline of $433,000, or 3.3%. Net revenue results for the nine months ended September 30, 2011 benefited by $275,000 from currency exchange rates.
Gross profit in the quarter ended September 30, 2011 decreased by $45,000, or 2.1%, from the comparable period in 2010. Gross profit as a percentage of net revenues decreased to 51.4% in the quarter ended September 30, 2011 from 53.9% in the same period of 2010 primarily due to higher instrument sales by our European subsidiary, which have a lower gross margin percentage than reagent sales. Gross profit in the nine months ended September 30, 2011 decreased by $393,000, or 5.7%, from the comparable period in 2010. Gross profit as a percentage of net revenues decreased to 52.2% in the nine months ended September 30, 2011 from 53.5% in the same period of 2010 primarily due to lower margins at our European operations.
Operating expenses for the quarter ended September 30, 2011 decreased 5.3% to $3,083,000 from $3,255,000 for the same period of 2010. The decrease in operating expenses was primarily the result of a $444,000, or 24.7%, decrease in general and administrative expenses, partially offset by an increase of $222,000, or 20.2%, in selling and administrative expenses and an increase of $50,000, or 13.8%, in research and development expenses. The decrease in general and administrative expenses for the quarter ended September 30, 2011 was primarily due to severance costs included in the same period of 2010 and a decrease in the number of executive officers in the 2011 period. Selling and administrative expenses for the quarter ending September 30, 2011 increased due to the addition of sales force personnel. Research and development expenses for the quarter ended September 30, 2011 increased due to the increase in new product development, including additional staff allocated to research and development activities. For the nine months ended September, 30 2011, operating expenses were $9,726,000 compared with $10,204,000 in the same period of 2010, a reduction of 4.7%.
Loss from operations for the quarter ended September 30, 2011 was $997,000 compared with $1,124,000 in the same period of 2010. Net loss for the quarter ended September 30, 2011 was $1,234,000, or $0.04 loss per share, compared with net loss of $1,177,000, or $0.04 loss per share, in the same period of 2010. Loss from operations for the nine months ended September 30, 2011 was $3,166,000 compared with $3,250,000 in the same period of 2010. For the nine months ended September 30, 2011, net loss was $3,021,000, or $0.10 loss per share, compared with net loss of $3,445,000, or $0.12 loss per share, in the same period of 2010.
About IVAX Diagnostics, Inc.
IVAX Diagnostics, Inc. (www.ivaxdiagnostics.com), headquartered in Miami, Florida, is a fully integrated in vitro diagnostics company that develops, manufactures and distributes in the United States and internationally, proprietary diagnostic reagents, test kits and instrumentation, primarily for autoimmune and infectious diseases, through its three subsidiaries: Diamedix Corporation (U.S.), Delta Biologicals S.r.l. (Europe) and ImmunoVision, Inc. (U.S.).
Safe Harbor Statement
Except for the historical matters contained herein, statements in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements involve risks and uncertainties that may affect the business and prospects of IVAX Diagnostics, Inc., including, without limitation: IVAX Diagnostics’ ability to successfully improve its financial condition, results of operations and cash flows; IVAX Diagnostics’ ability to successfully implement cost containment efforts and achieve a reduction in its expenses; IVAX Diagnostics’ ability to successfully grow its business, whether during the anticipated time frame or at all; IVAX Diagnostics’ ability to successfully expand its suite of products; IVAX Diagnostics’ ability to successfully increase its global footprint, whether by increasing sales in the U.S. and other markets or otherwise; economic, competitive, political, governmental and other factors affecting IVAX Diagnostics and its operations, markets and products; the success of IVAX Diagnostics’ technological, strategic and business initiatives; IVAX Diagnostics’ ability to achieve cost advantages from its own manufacture of instrument systems, reagents and test kits; and other risks and uncertainties that may cause results to differ materially from those set forth in the forward-looking statements. In addition to the risks and uncertainties set forth above, investors should consider the economic, competitive, governmental, technological and other risks and uncertainties discussed in IVAX Diagnostics’ filings with the Securities and Exchange Commission, including, without limitation, the risks and uncertainties discussed under the heading “Risk Factors” in such filings.
IVAX DIAGNOSTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Period Ended September 30, | | Three months | | | Nine months | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| | | | | | | | | | | | | |
| Net revenues | | $ | 4,059,598 | | | $ | 3,952,606 | | | $ | 12,568,953 | | | $ | 13,001,930 | |
| Cost of sales | | | 1,973,863 | | | | 1,821,597 | | | | 6,008,085 | | | | 6,048,179 | |
Gross profit | | | 2,085,735 | | | | 2,131,009 | | | | 6,560,868 | | | | 6,953,751 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
Selling and marketing | | | 1,320,244 | | | | 1,097,877 | | | | 4,054,260 | | | | 3,655,070 | |
General and administrative | | | 1,350,734 | | | | 1,794,444 | | | | 4,274,806 | | | | 5,337,478 | |
Research and development | | | 412,231 | | | | 362,251 | | | | 1,397,333 | | | | 1,211,541 | |
Total operating expenses | | | 3,083,209 | | | | 3,254,572 | | | | 9,726,399 | | | | 10,204,089 | |
| | | | | | | | | | | | | | | | | |
(Loss) from operations | | | (997,474 | ) | | | (1,123,563 | ) | | | (3,165,531 | ) | | | (3,250,338 | ) |
| | | | | | | | | | | | | | | | | |
| Other income (expense): | | | | | | | | | | | | | | | | |
Interest income (expense) | | | (1,892 | ) | | | 2,352 | | | | (9,112 | ) | | | 3,249 | |
Other income (expense), net | | | (205,699 | ) | | | (28,044 | ) | | | (166,762 | ) | | | (115,197 | ) |
Total other income (expense), net | | | (207,591 | ) | | | (25,692 | ) | | | (175,874 | ) | | | (111,948 | ) |
| | | | | | | | | | | | | | | | | |
| Loss before income taxes | | | (1,205,065 | ) | | | (1,149,254 | ) | | | (3,341,405 | ) | | | (3,362,286 | ) |
| | | | | | | | | | | | | | | | | |
| Provision (credit) for income taxes | | | 28,614 | | | | 27,503 | | | | (320,224 | ) | | | 83,189 | |
| | | | | | | | | | | | | | | | | |
| Net loss | | $ | (1,233,679 | ) | | $ | (1,176,758 | ) | | $ | (3,021,181 | ) | | $ | (3,445,475 | ) |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net loss per share | | | | | | | | | | | | | | | | |
| Basic and diluted | | $ | (0.04 | ) | | $ | (0.04 | ) | | $ | (0.10 | ) | | $ | (0.12 | ) |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| WEIGHTED AVERAGE NUMBER OF COMMON | | | | | | | | | | | | | | | | |
SHARES OUTSTANDING: | | | | | | | | | | | | | | | | |
Basic | | | 34,391,554 | | | | 27,649,887 | | | | 29,943,392 | | | | 27,649,887 | |
Diluted | | | 34,391,554 | | | | 27,649,887 | | | | 29,943,392 | | | | 27,649,887 | |
-more-
IVAX DIAGNOSTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | September 30, | | | December 31, | |
| | | 2011 | | | 2010 | |
| ASSETS | | | | | | |
| | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 3,939,189 | | | $ | 1,826,228 | |
| Accounts receivable, net of allowances for doubtful accounts of $648,251 in 2011 and $399,376 in 2010 | | | 5,775,146 | | | | 5,344,205 | |
| Inventories, net | | | 4,293,854 | | | | 4,077,896 | |
| Other current assets | | | 262,836 | | | | 146,366 | |
| Total current assets | | | 14,271,025 | | | | 11,394,695 | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 1,532,155 | | | | 1,618,136 | |
| Equipment on lease to customers, net | | | 693,683 | | | | 679,438 | |
| Product license | | | 282,936 | | | | 282,936 | |
| Goodwill | | | 870,290 | | | | 870,290 | |
| Restricted deposits | | | 107,066 | | | | 228,680 | |
| Other assets | | | 45,815 | | | | 26,847 | |
| Total assets | | $ | 17,802,970 | | | $ | 15,101,022 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 2,235,539 | | | $ | 1,597,555 | |
| Accrued license payable | | | 135,970 | | | | 132,521 | |
| Revolving line of credit | | | 379,661 | | | | - | |
| Accrued expenses and other current liabilities | | | 2,333,343 | | | | 2,511,698 | |
| Capital lease obligation, current | | | 76,795 | | | | 71,826 | |
| Total current liabilities | | | 5,161,308 | | | | 4,313,600 | |
| | | | | | | | | |
| Other long-term liabilities: | | | | | | | | |
| Capital lease obligation, long-term | | | 42,378 | | | | 100,612 | |
| Deferred tax liabilities | | | 412,803 | | | | 365,184 | |
| Other long-term liabilities | | | 1,036,163 | | | | 955,056 | |
| Total other long-term liabilities | | | 1,491,344 | | | | 1,420,852 | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
| | | | | | | | | |
| Shareholders’ equity: | | | | | | | | |
Common stock, $0.01 par value, authorized 50,000,000 shares, issued and outstanding 27,649,887 in 2010 and 2009 | | | 343,915 | | | | 276,498 | |
| Stock subscription receivable | | | (10,000,000 | ) | | | - | |
| Capital in excess of par value | | | 56,035,037 | | | | 41,389,404 | |
| Accumulated deficit | | | (34,707,653 | ) | | | (31,686,472 | ) |
| Accumulated other comprehensive loss | | | (520,981 | ) | | | (612,860 | ) |
| Total shareholders’ equity | | | 11,150,318 | | | | 9,366,570 | |
| Total liabilities and shareholders’ equity | | $ | 17,802,970 | | | $ | 15,101,022 | |
######
