Thursday October 16 3:24 PM EDT
Company Press Release
ChemTrak Reports Results for Third Quarter of 1997
SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 16, 1997--ChemTrak, Inc. (NASDAQ:CMTR) today reported net income for the quarter ended September 30, 1997 of $161,000, or $0.01 per share, compared to a loss of $2,087,000 ($0.20 per share) for the same period last year.
Total revenues for the quarter were $3,416,000, an increase of $2,833,000 over the $583,000 in revenues reported in the third quarter of 1996. These increases in earnings and revenues are principally attributable to a one-time payment from Astra Merck, Inc. of $2,400,000 for the return to ChemTrak of the rights to market HPChek(TM), ChemTrak's rapid whole blood H.Pylori test, and receipt by Astra Merck, Inc. of a non-exclusive option to market the product.
Importantly, this increase in ChemTrak revenues also reflects a 14 percent increase in product revenues, reflecting the launch this year of ChemTrak's new brands, Parent's Alert(R) and ColoCARE(R), as well as continued sales of CholesTrak(R).
The cost of products sold during the quarter, $1,255,000, increased $335,000 from the third quarter of 1996, due to a one-time manufacturing problem, now resolved. Marketing, general and administrative expenses of $1,576,000 were up $512,000 from the third quarter of 1996, reflecting higher advertising expenditures during the quarter, particularly in support of CholesTrak. Interest income of $35,000 during the quarter compares with interest expenses of $239,000, reflecting the conversion of the majority of the company's convertible debt.
For the nine months ended September 30, 1997, ChemTrak's revenues increased to $5,727,000 over the $2,195,000 reported for the first three quarters of 1996. The $3,532,000 increase is the result of the Astra Merck, Inc. transaction and a six percent increase in product sales. Net loss for the nine-month period amounted to $2,788,000, down $3,584,000 from the 1996 nine-month total of $6,372,000. The lower loss reflects revenue gains from increased product sales, plus higher funded research and other revenues resulting from the payment from Astra Merck, Inc.
''These results are consistent with ChemTrak's strategy of delivering convenient over-the-counter home testing products to consumers through the major chain drug stores,'' said Edward F. Covell, President and Chief Executive Officer. ''The delivery of more of our products to major retail outlets, the increased investment in advertising, and the gains in product revenue indicate that our business model is meeting with acceptance in the marketplace. In the coming months, we expect to be able to announce placing our product on the shelves of additional chain drug stores. In addition, we have been increasing our focus on penetrating the POL (Physicians Office Lab) market, and expect to be able to announce further developments in this area.''
ChemTrak has successfully launched two major new products in fiscal 1997: ColoCARE, A Home Test to Detect the Early Warning Signs of Colorectal Disease, and, most recently, Parent's Alert, a home testing service that provides parents a proactive resource to combat the drug problem in their own homes.
Parent's Alert includes educational materials, counseling, and the most accurate urine test available. The new test screens for eight drugs most commonly abused by young people. Parent's Alert is now being stocked at all 3,900 outlets of CVS, the nation's largest national drug store chain, and it will be rolling out into other major drug store chains in the near future.
Marketing and public relations support has also begun. The test service was prominently featured October 9 on the ''48 Hours'' news program, reaching some eight million viewers on the CBS television network.
The ColoCARE product is currently being offered by major drug chain stores and mass merchandisers throughout the U.S. Since shipping began in March of this year, ColoCARE is now available at most of the nation's leading drug store chains. Advertising for this brand begins this month.
Founded in 1985, ChemTrak is a full-service medical diagnostics company offering reliable and easy-to-use medical testing systems for in-home use and use in doctors' offices. ChemTrak medical test kits are designed to screen and diagnose health conditions with accuracy comparable to physician and laboratory-administered tests.
Except for the historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results might differ materially from these statements due to risks and uncertainties, including determinations by the FDA, the impact of competitive product and pricing, the timely development and acceptance of new products and medical market conditions and other factors discussed in the company's 1996 form 10-K.
CHEMTRAK INCORPORATED
SUMMARY STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Third quarter ended Nine Months ended
September 30, September 30,
1997 1996 1997 1996
Net revenues:
Product sales $ 666 $ 583 $2,144 $2,020
Funded research
and other 2,750 -- 3,583 175
Total revenues 3,416 583 5,727 2,195
Cost and expenses:
Cost of product
revenues 1,255 920 2,476 2,475
Research and
development 459 447 1,491 1,920
Marketing, general
and administrative 1,576 1,064 4,729 3,337
Total costs and
expenses 3,290 2,431 8,696 7,732
Operating income (loss) 126 (1,848) (2,969) (5,537)
Interest and income
(expense), net 35 (239) 181 (835)
Net income (loss) $ 161 $ (2,087) $ (2,788) $(6,372)
Net income (loss) per share $ 0.01 $ (0.20) $ (0.22) $ (0.65)
Shares used in calculating
per share data 13,081 10,192 12,673 9,808
CHEMTRAK INCORPORATED
BALANCE SHEET DATA
(In thousands)
Sept. 30, 1997 Dec. 31, 1996
Cash, cash equivalents and
short-term investments $ 2,641 $ 4,692
Working capital 2,014 4,656
Property and equipment, net 2,134 2,738
Total assets 6,851 8,841
Total stockholders' equity 4,214 5,030
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Contact:
ChemTrak
Donald V. Fluken, 408/773-8156
or
Neale-May & Partners
Dick Claeys, 415/328-5555, ext. 125 |
