Hemagen Diagnostics Reports Record Earnings For
Third Quarter
Business Wire - August 11, 1998 08:51
WALTHAM, Mass.--(BW HealthWire)--Aug. 11, 1998--Hemagen Diagnostics, Inc.
(NASDAQ:HMGN)(NASDAQ:HMGNW)(BSE:HGN) is pleased to announce that gross
revenues for its third quarter ending June 30, 1998, were $3,453,112 compared to $3,253,751
for the same period last year. Net income for the quarter was $276,347 or $.04 per share
compared to $118,930 or $.02 per share reported last year; this represents a 13% increase.
Revenues for the nine month period were slightly lower than those reported last year, but the
decline could be completely accounted for by a decrease in revenues from their contract
manufacturing agreement with Carter Wallace. Hemagen is not involved in the sale of Carter
Wallace products to the end-user and therefore does not control its sales volume. Dr. Franzblau,
President and CEO, is quite happy with the performance of all of the Company's divisions,
especially the very positive results from the Company's Hemagen/Virgo product line during the
past nine months, increasing approximately 26% from the revenues of a year ago.
In addition to the positive earnings report for the quarter, Hemagen has hired an outside sales
force to focus on the United States and European markets. Until now, the Company had totally
relied on telemarketing to successfully increase sales approximately 550% during the past five
years. Dr. Franzblau states, "We believe that now is the right time to reinforce and complement
our present selling techniques with the outside sales personnel. Although it will take time, we
expect significant increases in sales in 1999 due to this very exciting addition to our selling and
marketing strategy."
On January 13, 1998, the company announced that it had signed a letter of intent to acquire the
Analyst instrument from Dade Behring, Inc. The Analyst is a versatile bench top centrifugal
clinical chemistry analyzer, which focuses on both the physician and the veterinary office
laboratory. The instrument is easy to use, cost effective, very reliable, and can provide results of a
panel of clinical chemistries in ten minutes, including cholesterol, glucose, triglycerides, and
bilirubin.
The consummation of the acquisition is subject to Hemagen completing its due diligence
investigation of the Analyst business, the financing of the acquisition and ultimately the execution
of a definitive written agreement with Dade Behring. The execution of the final documents should
be consummated on or before August 31, 1998, barring any unforeseen complications. The
Company believes that the Analyst system is extremely attractive in today's clinical chemistry
market and serves well to complement our RAICHEM division in California.
With the Analyst in place, Hemagen will emerge as a significant force in the clinical chemistry
arena and the acquisition will allow for many opportunities to enhance the Company's other
product lines. Plans for new product development for the Analyst are already underway, with the
primary focus being on a new reagent rotor for the veterinary market.
Hemagen Diagnostics, Inc. develops, manufactures and markets more than 110 FDA-cleared
proprietary medical diagnostic test kits used to aid in the diagnosis of autoimmune and infectious
diseases and to measure important constituents in human blood. The company focuses on
markets which offer significant growth opportunities.
Except for any historical information contained herein, the matters discussed in this press release
contain forward-looking statements that involve risks and uncertainties which are described in the
Company's Securities and Exchange Commission reports and filings.
Consolidated financial statements
Hemagen Diagnostics, Inc. and subsidiary
(Unaudited)
Statement of Operations (condensed)
Three Months Ended Nine Months Ended
June 30 June 30
1998 1997 1998 1997
REVENUES $3,453,112 $3,253,751 $9,037,276 $9,435,742
COSTS AND EXPENSES
Cost of product
sales 2,002,234 1,880,163 5,111,675 5,680,884
Research and
development 251,142 267,163 802,891 729,424
Selling, general
and administrative 935,619 965,650 2,726,387 2,745,742
3,188,995 3,112,976 8,640,953 9,156,050
OPERATING INCOME 264,117 140,775 396,323 279,692
Other income (expense), 12,230 (21,845) (19,969) (59,310)
net
NET INCOME $276,347 $118,930 $376,354 $220,382
Net income per share
- fully diluted $0.04 $0.02 $0.05 $0.03
Weighted average
shares outstanding -
fully diluted 7,869,071 7,711,431 7,853,390 7,721,321
Balance Sheet (condensed)
June 30, Sept. 30,
1998 1997
ASSETS
Current assets:
Cash and cash equivalent $920,639 $294,086
Restricted cash 96,050 -
Short-term investments - 730,827
Accounts receivable (net) 1,931,676 2,288,793
Inventory 4,750,994 3,953,601
Prepaid expenses and other
current assets 242,379 221,646
TOTAL CURRENT ASSETS 7,941,738 7,488,953
Net property and equipment 2,259,334 2,545,470
Other assets 1,478,283 1,512,227
TOTAL ASSETS $11,679,355 $11,546,650
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable and
accrued expenses $881,959 $785,135
Notes payable - 198,983
Current portion of long-term debt 282,680 347,388
TOTAL CURRENT LIABILITIES 1,164,639 1,331,506
Long-term debt - 189,281
Stockholders equity 10,514,716 10,025,863
TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY $11,679,355 $11,546,650
CONTACT: Hemagen Diagnostics, Inc.
William Franzblau, 781/890-3766
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