IVAX Diagnostics, Inc. (NYSE Amex: IVD), a fully integrated in
vitro diagnostics company, reports its financial results for the
fourth quarter and full year ended December 31, 2011.
Kevin D. Clark, Chief Executive Officer, Chief Operating Officer
and President of IVAX Diagnostics, said, “I am pleased to report a
turnaround in the fourth quarter of 2011, as compared to the fourth
quarter of 2010, with a significant reduction in operating loss to
almost break-even, resulting from an increase in revenues and a
significant reduction in operating expenses. After reducing costs
in 2010, we continued our streamlining and again reduced operating
expenses significantly in 2011. This has enabled us to achieve
an operating result close to break-even for the fourth quarter of
2011. Our cash position also improved dramatically during 2011, due
to new debt and equity funding and much lower cash used in
operations. Looking ahead into the remainder of 2012, now that we
have become much more streamlined, we have begun focusing on
implementing a number of new initiatives in an effort to grow sales
and product range, organically as well as inorganically, both in
the United States and internationally. These efforts are backed by
our previously reported stock purchase agreement and warrant with
our principal stockholder, ERBA Diagnostics Mannheim GmbH, which
has already provided us with $5.45 million of equity funding and
which has agreed to provide us with another $10.0 million pursuant
to the stock purchase agreement and which has the right to provide
us with an additional $14.55 million pursuant to the warrant.”
Highlights of Operating Results for the Quarter and Year
Ended December 31, 2011
For the quarter ended December 31, 2011, net revenue increased
to $4.2 million from $4.0 million in the quarter ended
December 31, 2010. Gross profit for the quarter ended December
31, 2011 increased to $2.0 million from $1.9 million in the quarter
ended December 31, 2010. Gross profit margins for the quarter ended
December 31, 2011 increased to 48.7% from 46.3% in the quarter
ended December 31, 2010. Operating expenses for the quarter ended
December 31, 2011 significantly decreased to $2.1 million from $2.8
million in the quarter ended December 31, 2010. The loss from
operations for the quarter ended December 31, 2011 significantly
decreased to $0.1 million from $0.9 million in the quarter ended
December 31, 2010. Net loss was $0.3 million, or $0.01 loss
per share, in the quarter ended December 31, 2011 compared to net
loss of $0.8 million, or $0.03 loss per share, in the quarter ended
December 31, 2010.
Net revenues for the year ended December 31, 2011 were $16.8
million compared with $17.0 million in the year ended December 31,
2010. The decrease in revenue included decreases of $0.3 million
from domestic operations offset by an increase of $0.1 million from
European operations. European revenue included $0.3 million due to
the fluctuation of the U.S. dollar relative to the Euro. As
measured in Euros, European revenue for 2011 decreased 3.4%
compared to European revenue generated in 2010, principally due to
a decline in the volume of reagent sales. The decline in domestic
revenue for 2011 compared with 2010 was also primarily the result
of a decrease in reagent sales. Gross profit in 2011 was $8.6
million compared with $8.8 million in 2010. Gross profit margins
were 51.3% in 2011 compared with 51.8% in 2010. Gross margin
percentage declined in 2011 mainly due to higher instrument sales,
which have lower margins than reagent sales. Operating expenses for
the year ended December 31, 2011 were $11.8 million compared with
$13.0 million in the year ended December 31, 2010. Selling expenses
increased by $0.2 million in 2011 compared to 2010 mainly due to
salaries for newly hired sales personnel and marketing expenses
related to the launch of new products in the United States. General
and administrative expenses decreased by $1.1 million in 2011
compared to 2010, principally due to a decrease in the number of
executive officers and severance cost in 2010 of $0.7 million which
was not incurred in 2011. These and other decreases in general and
administrative expenses were offset by higher bad debt provisions
in 2011. Research and development expenses decreased by $0.2
million in 2011 compared to 2010 principally due to the decrease in
research and development expenses in the United States following
the regulatory approval and commercial release of the Mago®
4S. Other expense of $0.3 million in 2011 was primarily due to
unrealized foreign exchange losses. The loss from operations in
2011 was $3.2 million compared with a loss from operations of $4.2
million in 2010. Net loss for 2011 was $3.3 million, or $0.11 loss
per share, compared with net loss of $4.2 million, or $0.15 loss
per share, in 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: the risks and uncertainties related to the
transactions contemplated by IVAX Diagnostics’ stock purchase
agreement with ERBA Diagnostics Mannheim GmbH, including that the
transactions contemplated to be consummated at the future closings
under the stock purchase agreement may not be consummated on the
contemplated terms, in the time frame anticipated, or at all, that
the warrants may not be exercised, in whole or in part, by ERBA
Diagnostics Mannheim, that ERBA Diagnostics Mannheim has the sole
discretion regarding its decision of whether or not, and if so
when, to exercise the warrants, in whole or in part, and such
decision will be based upon considerations ERBA Diagnostics
Mannheim deems to be appropriate, which may include, among other
things, the future market price of IVAX Diagnostics’ common stock,
which is subject to volatility and a number of other factors, many
of which may be beyond IVAX Diagnostics’ control, and that, when
deciding whether or not, and if so when, to exercise the warrants,
in whole or in part, ERBA Diagnostics Mannheim’s interest may
conflict with IVAX Diagnostics’ interests; IVAX Diagnostics’
ability to successfully improve its financial condition, results of
operations and cash flows; IVAX Diagnostics’ ability to
successfully capitalize upon past and existing, and implement new,
cost containment efforts and achieve a reduction in its expenses;
IVAX Diagnostics’ ability to successfully grow its business, sales
and product range in the U.S. and other markets, whether
organically or inorganically, 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 in the U.S. or other markets; IVAX
Diagnostics’ ongoing initiatives to reduce manufacturing costs,
manage operating expenses, increase sales in the U.S. and other
markets and otherwise improve its operating results and performance
may not be successful or result in the positive financial impact
expected, whether in the time frame anticipated, or at all; IVAX
Diagnostics may not be successful in identifying or consummating
acquisitions or other strategic opportunities and any identified
and consummated acquisition or other strategic opportunity may not
be successfully integrated and may not result in synergies,
operational efficiencies or other benefits anticipated and may not
otherwise improve IVAX Diagnostics’ financial condition, operating
results or cash position; 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; voting
control of IVAX Diagnostics’ common stock by ERBA Diagnostics
Mannheim; conflicts of interest with ERBA Diagnostics Mannheim and
with IVAX Diagnostics’ officers, employees and other directors,
including, without limitation, directors that are also executive
officers of ERBA Diagnostics Mannheim; 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
Period Ended December 31, Three months
Twelve months 2011
2010 2011
2010 (unaudited) (unaudited)
Net revenues $ 4,190,820 $ 4,029,812 $ 16,759,773 $
17,031,742 Cost of sales
2,150,378
2,164,499 8,158,463
8,212,678 Gross profit
2,040,442 1,865,313
8,601,310 8,819,064
Operating expenses: Selling 999,919 1,246,785
5,054,179 4,901,855 General and administrative 1,049,102 1,113,329
5,323,908 6,450,807 Research and development
54,192 427,789
1,451,525 1,639,330
Total operating expenses
2,103,213
2,787,903
11,829,612 12,991,992
Loss from operations (62,771 ) (922,590 ) (3,228,302
) (4,172,928 ) Other income: Interest income (12,850 ) 810
(21,962 ) 4,059 Other income (expense), net
(172,307 ) 180,702
(339,069 )
65,504 Total other income, net
(185,157 ) (181,512
) (361,031 )
69,563 Loss before income taxes (247,928
) (741,078 ) (3,589,333 ) (4,103,365 ) Provision for income
taxes
28,234 28,125
(291,990 )
111,314 Net loss
$
(276,162 ) $
(769,203 ) $
(3,297,343 ) $
(4,214,679 )
Net loss per share Basic and diluted
$
(0.01 ) $ (0.03
) $ (0.11 )
$ (0.15 )
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic
34,391,554
27,649,887 31,058,494
27,649,887 Diluted
34,391,554 27,649,887
31,058,494
27,649,887
IVAX DIAGNOSTICS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2011 2010
ASSETS
Current assets: Cash and cash equivalents $ 3,653,244 $
1,826,288 Accounts receivable, net of allowances for doubtful
accounts of $716,599 in 2011 and $399,376 in 2010 5,950,621
5,344,205 Inventories, net 3,830,295 4,077,896 Other current assets
231,992 146,366
Total current assets 13,666,152 11,394,695 Property,
plant and equipment, net 1,456,940 1,618,136 Goodwill, net 870,290
870,290 Equipment on lease, net 674,504 679,438 Product license
282,936 282,936 Restricted deposits 127,859 228,680 Other assets
128,203 26,847
Total assets
$ 17,206,884
$ 15,101,022
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Current liabilities: Accounts payable $ 2,345,838 $
1,597,555 Capital lease obligation, current 79,186 71,826 Accrued
license payable 129,490 132,521 Revolving line of credit 736,566 -
Accrued expenses and other current liabilities
1,744,221 2,511,698
Total current liabilities
5,035,301 4,313,600
Other long-term liabilities: Capital lease
obligations, noncurrent 21,287 100,612 Deferred tax liabilities
428,676 365,184 Other long-term liabilities
994,348 955,056
Total other long-term liabilities
1,444,311
1,420,852 Commitments and
contingencies Shareholders’ equity: Common stock, $0.01 par
value, authorized 100,000,000 shares, issued and outstanding
34,391,554 in 2011 and 27,649,887 in 2010 343,915 276,498 Capital
in excess of par value 46,035,037 41,389,404 Accumulated deficit
(34,983,815 ) (31,686,472 ) Accumulated other comprehensive loss
(667,865 )
(612,860 ) Total shareholders’ equity
10,727,272 9,366,570
Total liabilities and shareholders’ equity
$
17,206,884 $
15,101,022
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