Hemagen Diagnostics, Inc. Announces Gain on Sale of Baltimore Property, Books Approximately $1 Million in Cash on Balance Sheet
July 31 2006 - 10:00AM
Business Wire
Hemagen Diagnostics, Inc. (OTC:HMGN.OB) a biotechnology company
that develops, manufactures, and markets more than 150 FDA-cleared
proprietary medical diagnostic test kits, today announced the sale
of a manufacturing building that was purchased in June 2005. The
building was purchased for $800,000 plus regular and customary
expenses and was sold in July 2006 for $1,800,000, less expenses.
As a result of the sale, the Company will record a gain in the
fourth quarter of 2006. The building was originally purchased to
house the company's headquarters, to combine certain manufacturing
processes, and to provide additional space for expansion and
acquisition. William P. Hales, President and CEO, said, "We were
pleased to be able to sell our building and to realize a
substantial profit on the sale. Likewise, we also expect to be able
to achieve our operational goals in our current leased space. In
recording this transaction, we eliminated approximately $665,000 in
short-term liabilities related to the construction financing and
recorded approximately $1 million dollars in additional cash to the
balance sheet. This transaction will significantly improve the
company's current ratios and working capital, which were impacted
by the loan on the building and the use of working capital for the
building. We continue to focus on improving our operations,
increasing revenues through core growth and containing costs. We
remain focused on our number one goal of building shareholder value
and positioning the company for sustained profitability." Hemagen
Diagnostics, Inc., is a biotechnology company that develops,
manufactures, and markets more than 150 FDA-cleared proprietary
medical diagnostic test kits. Hemagen has three different product
lines. The Virgo(R) product line of diagnostic test kits is used to
aid in the diagnosis of certain autoimmune and infectious diseases,
using ELISA, Immunofluorescence, and hemagglutination technology.
Hemagen manufactures and markets a complete line of clinical
chemistry reagents through its wholly owned subsidiary Reagents
Applications, Inc., under the brand name Raichem, as well as under
various OEM arrangements. In addition, Hemagen manufactures and
sells the Analyst(R) an FDA-cleared clinical chemistry analyzer
used to measure important constituents in human and animal blood,
and the Endochek, a clinical chemistry analyzer used to measure
important constituents in animal blood. In the United States, the
Company sells its products directly to physicians, veterinarians,
clinical laboratories and blood banks and on a private-label basis
through multinational distributors of medical diagnostics and
supplies. Internationally, the Company sells its products primarily
through distributors. The Company sells the Analyst(R) and the
Endochek both directly and through distributors servicing
physicians' office laboratories and veterinarians' offices.
Hemagen's products are used in many of the largest laboratories,
hospitals, and blood banks around the world. The Company focuses on
markets that offer significant growth opportunities. The Company
was incorporated in 1985 and became a public company in 1993.
Except for any historical information contained herein, the matters
discussed in this press release contain forward-looking statements
that involve risks and uncertainties, including those described in
the Company's Securities and Exchange Commission Reports and
Filings. Certain Statements contained in this News Bulletin that
are not historical facts constitute forward-looking statements,
within the meaning of the Private Securities Litigation Reform Act
of 1995, and are intended to be covered by the safe harbors created
by that Act. Reliance should not be placed on forward looking
statements because they involve unknown risks, uncertainties and
other factors which may cause actual results, performance or
achievements to differ materially from those expressed or implied.
Forward looking statements may be identified by words such as
estimates, anticipates, projects, plans, expects, intends,
believes, should and similar expressions and by the context in
which they are used. Such statements are based upon current
expectations of the Company and speak only as of the date made. The
Company undertakes no obligation to update any forward-looking
statements to reflect events or circumstances after the date on
which they are made. Statements concerning the establishments of
reserves and adjustments for dated and obsolete products, expected
financial performance, on-going business strategies and possible
future action, which Hemagen intends to pursue to achieve strategic
objectives, constitute forward-looking information. The sufficiency
of such reserves and adjustments, expected performance,
implementation of on-going business strategies and possible future
action, the achievement of financial performance are each subject
to numerous conditions, uncertainties and risk factors. Factors
which could cause actual performance to differ materially from
these forward looking statements, include without limitation,
management's analysis of Hemagen's assets, liabilities and
operations, the failure to sell date sensitive inventory prior to
its expiration, the inability of particular products to support
goodwill allocated to them, competition, new product development by
competitors which could render particular products obsolete, the
inability to develop or acquire and successfully introduce new
products or improvements of existing product costs and difficulties
in complying with laws and regulations administered by the U. S.
Food and Drug Administration and the ability to assimilate
successfully product acquisitions.
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