Medtox Scientfic (AMEX:TOX)
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MEDTOX Scientific Announces Third Quarter Results
Improved Margins and Lower Expenses Contribute to Profitable Quarter
ST. PAUL, Minn., Nov. 4 /PRNewswire-FirstCall/ -- MEDTOX Scientific, Inc. ,
announced today results for the third quarter ended September 30, 2003. For the
three-month period, revenues were $13,568,000, compared to $13,632,000 from the
prior-year period. The Company recorded income before income tax for the
quarter of $492,000, compared to income before income tax of $537,000 for the
comparable period last year. Gross margin improved to 40.2% from 39.2% in the
third quarter of 2002 and income from operations improved to $902,000 from
$886,000. Net income was $383,000 compared to $11.3 million for the comparable
period last year. The Company recorded a non- cash tax benefit of $10.8 million
in the third quarter of 2002 related to its net operating loss carry forward.
Gross margin and operating expenses were positively impacted by staff reductions
and expense control measures. Selling, general and administrative expenses,
although flat with the third quarter last year, were reduced to 30.6% of
revenues, as compared to 34.2% and 33.9% of revenues in the first and second
quarters of this year respectively. Gross margin for the quarter of 40.2% of
revenues compared favorably to gross margins of 38.0% and 38.5% for the first
and second quarters of this year respectively.
The Company is continuing to take steps to further reduce costs and improve
operating efficiencies. As previously disclosed, three LEAN projects were
initiated in the Laboratory Services segment in the third quarter. These
projects have progressed to the point that it can be determined that operating
costs will be reduced further with the positive impact initially being
recognized in the first quarter of 2004.
The quarter also benefited from apparent improvements in the economy. Sample
volume from the Company's existing workplace drug testing clients, though not
yet at the previous year's level, showed an upturn from recent quarters.
Additionally, new drug screening sales in the Laboratory Services segment
continue to be strong. The Company continues to believe it will benefit as
economic recovery impacts job creation and growth.
"Although the quarter was relatively even with the third quarter last year,
considerable progress has been made when compared to the second quarter of this
year," said Dick Braun, CEO of MEDTOX. "Historically, the second and third
quarter results are similar and the improvement shown is significant, as
demonstrated by income from operations increasing to $902,000 in the quarter as
compared to $186,000 in the second quarter."
Margin improvement and lower operating expenses should also have a positive
impact on the fourth quarter, which is historically the most challenging. With
the prospects of a strengthening economy likely to lead to job growth in the
near term, coupled with the prospect of additional operating efficiencies, the
Company is optimistic with regard to 2004 results.
MEDTOX will hold a teleconference to discuss third quarter 2003 results today at
9:30 a.m. Central Time (10:30 a.m. Eastern). Dialing 800-387-5648 a few minutes
prior to the scheduled start time on November 4 will access a listen-only
broadcast of the teleconference. International callers may access the call by
dialing 706-634-5527. 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 http://www.medtox.com/ . An audio replay of the
conference call will be available through November 11 at 800-642-1687 conference
ID # 3411839. International callers may access the replay at 706-645-9291 with
the same conference ID #.
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. Further discussions of factors that may cause such
results to differ are identified on page three of the Company's 2002 annual
report on Form 10-K and incorporated herein by reference.
MEDTOX SCIENTIFIC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
REVENUES:
Laboratory services $10,391 $10,562 $30,010 $30,439
Product sales 3,177 3,070 9,186 9,462
13,568 13,632 39,196 39,901
COST OF REVENUES:
Cost of services 6,804 7,104 20,006 20,184
Cost of sales 1,304 1,178 3,925 3,539
8,108 8,282 23,931 23,723
GROSS PROFIT 5,460 5,350 15,265 16,178
OPERATING EXPENSES:
Selling, general and
administrative 4,157 4,137 12,878 12,152
Research and development 401 327 1,233 905
4,558 4,464 14,111 13,057
INCOME FROM OPERATIONS 902 886 1,154 3,121
OTHER INCOME (EXPENSE):
Interest expense, net (281) (332) (876) (1,025)
Other expense, net (129) (17) (363) (66)
(410) (349) (1,239) (1,091)
INCOME (LOSS) BEFORE INCOME
TAX (EXPENSE) BENEFIT 492 537 (85) 2,030
INCOME TAX (EXPENSE)
BENEFIT (109) 10,783 15 10,783
NET INCOME (LOSS) $383 $11,320 $ (70) $12,813
BASIC EARNINGS (LOSS) PER
COMMON SHARE $0.08 $2.36 $(0.01) $2.67
DILUTED EARNINGS (LOSS)
PER COMMON SHARE $0.08 $2.27 $(0.01) $2.55
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:
Basic 4,949,336 4,804,106 4,937,937 4,793,793
Diluted 5,057,238 4,988,958 4,937,937 5,029,818
MEDTOX SCIENTIFIC, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
September 30, December 31,
2003 2002
ASSETS
Cash and cash equivalents $568 $439
Accounts receivable 9,095 9,398
Inventories 3,535 4,395
Other current assets 1,920 2,018
Total current assets 15,118 16,250
Building, equipment and improvements, net 15,270 14,769
Other assets 26,448 27,036
Total assets $56,836 $58,055
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $12,642 $14,164
Long-term obligations 8,941 9,007
Stockholders' equity 35,253 34,884
Total liabilities and stockholders' equity $56,836 $58,055
DATASOURCE: MEDTOX Scientific, Inc.
CONTACT: Stephen Anderson of MEDTOX Scientific, +1-877-715-7236
Web site: http://www.medtox.com/