MEDTOX Scientific, Inc.
Corporate Presentation
July 19, 2005
Forward looking statements in this presentation are
made under the “safe harbor” provisions of the
Private Securities Litigation Reform Act of 1995.
Any such statements are subject to risks and
uncertainties that could cause actual results to
differ materially from those anticipated. Such
factors are described from time to time in the
Company's Annual Report on Form 10-K and other
reports filed with the Securities and Exchange
Commission.
MEDTOX
Who we are
Headquarters and laboratories in St. Paul, MN.
Device manufacturing facility in Burlington, NC.
415 employees
Amex: TOX
Market capitalization: $58.1 million*
2004 revenues: $56.7 million
5-year CAGR: 10%
Shares outstanding: 7.55 million**
Stockholders’ equity: $39.3 million**
*Based on stock price of $7.70 at close 6/30/05 and 7.55 million shares outstanding
**As of 6/30/05
MEDTOX
Value Proposition
State-of-the-art lab technology and test
devices—supported by value-added
services
Reliable information for hiring and medical
decision-making
Fast results, competitively-priced
Outcomes:
Improved candidate selection/retention rates
Improved patient/research results
MEDTOX
Our Strategy to Gain Market Share
Use value-added services to increase drug
testing market share
Gain market share in hospital lab area
through innovative products and Cardinal
Health relationship
Create customer solutions through IT strength
Use market intelligence and focus groups to
define future clinical market opportunities
Drive operational innovation and execution
Market Profile
Laboratory Services, Drugs-of-Abuse
Serving employers of all categories
Growth driven by workforce/population
increases/job mobility
Service business, differentiated via
technology and value-added services
Barriers to entry
SAMHSA Regulation, investment,
complexity
Sample collections, IT
Low offshore competitive risk because
of shipping time
2005: Improving market conditions
following recession and slow-job-
growth recovery
TOX REVENUES:
$27.9M
7.0 % market share
*Based on Washington G-2 Reports
$400 million*
Competition
Laboratory Services, Drugs-of-Abuse
Quest 38%
LabCorp 23%
LabOne 7%
MEDTOX 6%
Psychemedics 4%
ATN 4%
$400 Million Market
Primary Competitors
Based on Washington G-2 Reports
MEDTOX Progress and Initiatives
Laboratory Services, Drugs-of-Abuse
2004: Lab re-engineered through implementation of
LEAN and Six Sigma
Gaining market share in consolidating industry
Value-added services
eChain®
Data management
Collection site management
Training
Technical support and expertise
Policy review
More competitive through innovations like eChain®
eChain®
First multi-purpose electronic chain-of-custody system in
market
Web-based “thin client” application
Browser-based (minimum training)
Easily deployed at clinics
Used for lab-based and PROFILE®-II tests
Secure system architecture
Allows clients to track entire test process
Clients can utilize multiple clinics
Expedites collection process at clinics
No searching for client chain-of-custody forms
No “altering” other chain-of-custody forms
Market Profile
Specialty Lab Services
Large and growing market
opportunity
Serving hospitals, clinics,
HMO’s, other laboratories
Serving small- to mid-sized
Biotech and Pharma
Differentiated by specialization
Barriers to entry
Investment in infrastructure
Technical expertise
Growth driven by population
and demographics
Aging baby-boomers: more lab
tests, more clinical trials
$1 billion*
TOX REVENUES:
$15.3M
1.5 % market share
*MEDTOX estimate
MEDTOX Progress and Initiatives
Specialty Lab Services
Expanding diversity of services
Clinical trial support
Filter paper testing for lead
Metals laboratory
Clinical toxicology
Autopsy support testing
Financial performance
Non-seasonal, non-cyclical revenue streams
Focus of lab-based R&D efforts
2005: Lab re-engineering underway
Improvements through LEAN and Six Sigma
Market Profile
Drugs-of-Abuse Diagnostic Devices
Expanding market with high margins
Serving employers, rehab, and limited
rights market (prison, probation, parole)
Single-use test kits for POC (point-of-
collection) with results in minutes
Lab testing for positive test verification
Many competitors
Few manufacture own product
Varying degrees of quality
No other manufacturer can back up
product with own lab
$ 400 million*
TOX REVENUES:
$13.5 M
3.4 % market share
*MEDTOX estimate
MEDTOX Progress and Initiatives
Drugs-of-Abuse Diagnostic Devices
History of growth and profitability
Market leader
Approximately 60% gross margins
2004: LEAN initiatives
Defensibility:
Positive results: verification available in our certified lab
Value-added services
DARS™: Combination of education and services
PROFILE®-II A Test System
Exclusive adulterant indicator
Sure-Screen®, pending FDA approval
Exclusive “zero tolerance” test
MEDTOXScan™ automates reading device results
Supported by eChain®
SURE-SCREEN®
First of its kind in the market
Offers substantially lower
detection levels
First “zero-tolerance”-type device
Addresses “drug mixing” scenario
Convenient cup design/User-
friendly
Actual test device can be
separated and cup sent to
MEDTOX for confirmatory
testing
MEDTOXScan™
Interprets drug strips
electronically
Eliminates any interpretation
ambiguity
Stores multiple patient
records
Printer optional
Compact and portable
Can interface with hospital systems
Offers flexibility to hospital lab technicians
– Result “holds” until cleared by technician
Automates and expedites throughput
Overall Infrastructure Advantages
Continuing investment in new technology
Scientific and IT
Investments in automation, robotics, Web technology
CAPEX: $3.5 - $4.0 million/year
Six-Sigma and LEAN initiatives
Statistic-supported quality and cost control
Streamlined work flow
Laboratories in St. Paul, MN
Over 10,000 samples processed daily
Capacity for volume increase
Dedicated device plant in Burlington, NC
Design/manufacturing of state-of-art devices
Capacity for volume increase
MEDTOX Peer Comparisons
(As reported by Yahoo Finance)
2.7
2.4
N/A
$197.4M
$6.23
3/05
QDEL
Quidel
4.0
1.2
21.8
$174.6M
$13.75
4/05
BRLI
Bio Reference Labs
2.0
1.4
N/A
$202.4M
$8.75
3/05
SP
Specialty Labs
9.9
3.5
21.1
$70.2M
$13.60
3/05
PMD
Psychemedics
1.5
1.0
30.1
$55.7M
$7.39
3/05
TOX
MEDTOX Scientific
4.0
3.8
22.5
$993.1M
$58.80
3/05
BSTE
Biosite
3.7
1.5
25.3
$703.1M
$40.27
3/05
LABS
LabOne
(62.5%)
(56.5%)
(6.8%)
TOX vs Average
4.0
2.3
32.3
Average
7.2
3.9
31.0
$323.2M
$20.57
3/05
VIVO
Meridian Bioscience
2.3
3.1
51.2
$75.5M
$3.86
3/05
SDIX
Strategic Diagnostics
3.1
1.5
55.3
$18.3M
$0.86
3/05
ABMC
American BioMedica
Price/
Book
Price/
Sales
Price/
Earnings
Market
Cap
Price
7/15/05
Quarter
Ended
Ticker
Company
MEDTOX
Market Comparables*
Price/Earnings
Comps average: 1.07 x TOX’s Price/Book
ratio
Price/Sales
Comps average: 2.3 x TOX’s Price/Sales ratio
Price/Book
Comps average: 2.7 x TOX’s P/E ratio
* Based on closing prices on July 18, 2005