Exhibit 99.1
DATE: January 27, 2003
FROM:
MEDTOX Scientific, Inc.
402 West County Road D
St. Paul, MN 55112
Contact: Stephen Anderson (877) 715-7236
FOR IMMEDIATE RELEASE
MEDTOX SCIENTIFIC REPORTS PRELIMINARY UNAUDITED RESULTS FOR 2002
FINAL RESULTS TO BE RELEASED MARCH 6, 2003
ST. PAUL, January 27, 2003 - MEDTOX Scientific, Inc. (AMEX: TOX), announced that
it will release final results for fiscal 2002 on March 6, 2003. Based on
preliminary data, the Company expects annual revenue between $51.9 million and
$52.1 million, compared to $49.1 million for fiscal 2001. The Company
anticipates net income, including a one-time tax benefit, in the range of $2.46
to $2.49 per share, compared to diluted earnings per share of $0.54 for fiscal
2001. For the three month period ended December 31, 2002, MEDTOX estimates
revenue to range between $12.0 million and $12.2 million, compared to $12.3
million in the fourth quarter of 2001. The Company expects to record a pre-tax
net loss of $0.06 to $0.07 per share for the quarter, compared to net income of
$0.06 per share in the prior-year period.
"We are proud of our performance in 2002. Our results reflect the continued
challenging employment environment and our strategic investments to improve our
positions within our markets," said Dick Braun, MEDTOX chief executive officer.
"Despite operating within historically poor labor markets, we grew our
businesses, generated a profit, and positioned ourselves well for the future."
"Since over 60% of our revenue is related to hiring and employment levels, our
recent operating results reveal the impact of two consecutive years of negative
job growth in the U.S. economy. Our performance in the face of these declining
employment figures give our shareholders a strong reason to look favorably upon
our recent results and our future. A reduction in the raw number of U.S. jobs
not only translates to a smaller potential customer base for us, but it also
portends poorly for the number of individuals changing jobs, a key metric
driving volume in certain lines of our business. The latest preliminary
statistics from the U.S. Department of Labor indicate that consecutive years of
negative job growth only occurred three other times since 1950 and only one
other time over the last forty-four years. We anticipate an improved employment
and hiring situation in the future, since all of these periods were followed by
job growth exceeding 3.75% in the subsequent year. Further, the U.S. labor
market has not experienced three consecutive years of negative job growth since
the Great Depression. Thus, we believe that the employment environment is likely
to improve, but even if it doesn't in the very near term, we have proven our
ability to grow and remain profitable in extremely adverse labor markets."
Fourth quarter sales and earnings were negatively impacted by poor economic
conditions, especially within manufacturing and retail hiring where MEDTOX
typically would see a seasonal boost. In her most recent monthly statement, the
Commissioner of the Bureau of Labor Statistics, Kathleen P. Utgoff, noted
weakening within the labor market toward the end of 2002 and the "sizable job
losses" that occurred within the retail and manufacturing sectors. In spite of a
particularly difficult fourth quarter, annual revenues reached record levels in
both MEDTOX's Laboratory and Diagnostic segments for 2002.
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MEDTOX Scientific, Inc.
January 27, 2003
Page 2
Within the higher margin diagnostic business, the Company experienced
double-digit revenue growth for the fifth consecutive year. New client
relationships accounted for much of the Company's overall growth and, as in
previous quarters, offset lower volumes from the decreased hiring patterns of
existing clients and the shrinking of state budgets. Daily sample volume from
existing corporate and occupational health clients declined 11% for the year
compared to 2001 levels.
"A year ago, we explained our intent to invest in areas that will support our
future growth and profitability, and that is exactly what we did during 2002,"
said Braun. "We indicated that we were under-invested in our sales force, R&D,
information systems, and laboratory and manufacturing automation. We have
improved our Company in all of these areas, despite the challenging economic
environment in which we are operating. We also continue to diversify and grow
our specialty laboratory services, which are not directly impacted by the labor
environment. Revenue in specialty laboratory services, which includes esoteric
testing, therapeutic drug monitoring, Clinical Trial Services, and pediatric
screening, increased 23% to $12.4 million from the previous year's $10.1 million
figure. Our investments added to the decline in operating margins over the most
recent quarter, but will continue to enable us to diversify, gain market share
and add client relationships."
Chief marketing officer of MEDTOX, Jim Schoonover, said, "The focus and
efficiency of our sales model allowed us to continue to diversify and grow our
revenue streams through this difficult economic climate. In contrast, we see a
number of our competitors reducing investments in sales, customer service and
systems support. This has enabled us to continue to gain market share in all
product lines."
"If we can outperform our competitors, diversify and improve our operations,
gain market share, grow our revenue and earn a profit in this extremely
difficult economic environment, we expect to be rewarded when our existing
workplace clients return to their previous hiring practices," said Braun. "We
will continue to strategically invest in all aspects of our business, with a
particular focus on gaining market share from our competitors. We are well
positioned within our markets, and have momentum to continue our profitable
growth throughout 2003 and beyond."
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/
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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.