Exhibit 99.1
FROM: FOR:
BlueFire Partners MEDTOX Scientific, Inc.
150 South Fifth St., Suite 1300 402 West County Road D
Minneapolis, MN 55402 St. Paul, MN 55112
Contact: Doug Ewing (612) 344-1036 Contact: Richard J. Braun (877) 715-7236
FOR IMMEDIATE RELEASE
MEDTOX SCIENTIFIC REPORTS RECORD SECOND-QUARTER PERFORMANCE
Sales And Margin Increases Contribute to Record Net Income
ST. PAUL, Minn., July 23, 2002 - MEDTOX Scientific, Inc. (AMEX:TOX)
o Second-quarter revenue increased to $13,918,000, a 10.8% increase over last
year.
o Consolidated gross margin increased to 42.6% from 40.1%.
o Gross profit increased to $5,922,000, a 17.6% increase over last year.
o Net income increased to $1,008,000.
MEDTOX Scientific, Inc., announced today record revenues and net income for the
second quarter ended June 30, 2002. For the three-month period, revenues
increased 10.8% to $13,918,000 compared to $12,561,000 from the prior-year
period. Gross profit increased 17.6% to $5,922,000 compared to $5,036,000 from
the prior-year period. Operating income increased 9.0% to $1,381,000 compared to
$1,267,000 from the prior-year period. Net income increased 5.0% to $1,008,000
compared to $960,000 from the prior-year period. Net income per diluted share
was 20 cents, compared to 21 cents last year, reflecting an increase in shares
outstanding.
Dick Braun, chief executive officer, said, "We are pleased with second quarter
results, particularly in light of challenging economic conditions. The record
revenues and earnings were achieved even with an 18% decline from last year's
second quarter in total sample volume from pre-existing occupational health and
corporate (workplace) clients, a direct result of external economic factors. The
18% decline in sample volume from pre-existing workplace clients is an
improvement from the 21% decline in the first quarter of 2002 compared to the
same quarter in 2001. Our continued success in acquiring new workplace client
relationships and gaining market share offset the economic negatives, resulting
in net workplace sample volume increasing by 1.5%. Overall laboratory specimen
volume was also bolstered by a 17% increase in other specialty laboratory
volume. Taken together, these positive influences resulted in 5.5% higher
laboratory segment revenue and overall sample volume increase of 4% for the
quarter.
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Medtox Scientific, Inc.
July 23, 2002
Page 2
"POC segment revenues increased 31% in the second quarter to $3,378,000 from
$2,570,000 for the comparable period in 2001. POC revenues were also negatively
impacted by nationwide employment levels, however strong sales in the PROFILE
II-ER(R), PROFILE-IIA(R) and VERDICT-II(R) product lines resulted in a total of
614,000 disposable POC devices sold in the second quarter compared to 464,000
devices sold in the same period in 2001. Segment gross margin was 62.3% for the
three-month period compared to 63.0% for the same prior-year period with the
modest variation attributable to product mix of sales.
"Although the slower economy continues to impact certain of our markets, new
customer additions in those markets are mitigating the current lower testing
volume from pre-existing clients," Braun said. "As the economy strengthens we
anticipate built-in growth and operating leverage from existing workplace
clients as they again add employees. In addition, we are continuing to increase
our higher-margin POC business as a percent of total revenues and to
successfully diversify into other specialty laboratory services that are higher
margin and not directly affected by national employment hiring levels.
"In the second half of 2002 we plan to continue our emphasis on sales growth
while improving margins, which is consistent with our long-term objectives. We
will also continue to invest in those areas that will support future growth and
profitability. Specific areas targeted for increased investments are sales, R&D,
information systems, and laboratory and manufacturing automation. As we have
stated before these investments will be made with a continued vigilance and
commitment to increasing revenues, gross margin and income, not at their
expense," said Braun.
MEDTOX will hold a teleconference to discuss second quarter 2002 results today
at 9:30 a.m. Central Time (10:30 a.m. Eastern). Dialing 877-381-6503 a few
minutes prior to the scheduled start time on July 23 will access a listen-only
broadcast of the teleconference. Callers should ask for the MEDTOX quarterly
conference call, hosted by Dick Braun, president and CEO of MEDTOX. A
simultaneous webcast of the conference call will be available on the MEDTOX
website in the "investors" section at www.medtox.com. An audio replay of the
conference call will be available through July 30 at 800-642-1687, reservation
code # 4908531. International callers may access the replay at 706-645-9291,
reservation code # 4908531.
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Medtox Scientific, Inc.
July 23, 2002
Page 3
MEDTOX Scientific, Inc., headquartered in St. Paul, Minn., is a provider of high
quality specialized laboratory and on-site/point-of-collection (POC) devices.
The company also supports customers with complete logistics, data and program
management services. MEDTOX develops and manufactures diagnostic devices for
quick and economical on-site/point-of-collection analysis for drugs of abuse,
therapeutic drugs and biological and agricultural toxins and provides employment
drug screening and occupational health testing. MEDTOX is a leader in providing
esoteric laboratory testing services to hospitals and laboratories nationwide.
This includes both central laboratory and bio-analytical testing for
pharmaceutical clinical trials. To be automatically alerted by e-mail about
company information, please go to
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=tox&script=1900 and
follow the directions on the page. For more information see
http://www.medtox.com.
Note: Forward-looking statements contained in this press release are made under
the Private Securities Reform Act of 1995. Actual results may differ due to a
number of factors including a change in the employment pattern of client
companies, the ability of MEDTOX to acquire new business, and changes in the
competitive environment. Fuller discussions of factors that may cause such
results to differ are identified on page three of the company's 2001 annual
report on Form 10-K and incorporated herein by reference.
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Medtox Scientific, Inc.
July 23, 2002
Page 4
MEDTOX SCIENTIFIC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
------------- ------------- -------------- --------------
REVENUES:
Laboratory services $10,540 $9,991 $19,877 $19,295
Product sales 3,378 2,570 6,392 4,872
------------------- ------------------ ----------------- -----------------
13,918 12,561 26,269 24,167
COST OF REVENUES:
Cost of services 6,724 6,575 13,080 12,970
Cost of sales 1,272 950 2,361 2,003
------------------- ------------------ ----------------- -----------------
7,996 7,525 15,441 14,973
------------------- ------------------ ----------------- -----------------
GROSS PROFIT 5,922 5,036 10,828 9,194
OPERATING EXPENSES:
Selling, general and administrative 4,237 3,451 8,015 6,591
Research and development 304 318 578 633
------------------- ------------------ ----------------- -----------------
4,541 3,769 8,593 7,224
------------------- ------------------ ----------------- -----------------
INCOME FROM OPERATIONS 1,381 1,267 2,235 1,970
OTHER INCOME (EXPENSE):
Interest expense (340) (288) (693) (528)
Other expense, net (33) (19) (49) (44)
------------------- ------------------ ----------------- -----------------
(373) (307) (742) (572)
------------------- ------------------ ----------------- -----------------
NET INCOME $1,008 $ 960 $1,493 $1,398
=================== ================== ================= =================
BASIC EARNINGS PER COMMON
SHARE (1) $ 0.21 $ 0.22 $ 0.31 $ 0.33
=================== ================== ================= =================
DILUTED EARNINGS PER COMMON
SHARE (1) $ 0.20 $ 0.21 $ 0.29 $ 0.31
=================== ================== ================= =================
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING:
Basic (1) 4,792,279 4,273,852 4,788,576 4,268,513
Diluted (1) 5,145,718 4,544,931 5,086,791 4,513,027
(1) Share and per share amounts for the three and six months ended June 30, 2001
have been restated for the ten percent stock dividends paid on July 5, 2002 and
November 9, 2001.