OraSure Technologies(US:OSUR)2021-03-01 21:31Financial Performance - Consolidated net revenues for the year ended December 31, 2020, increased by 11% to $171.7 million, compared to $154.6 million in 2019 [349]. - Net product and service revenues rose by 12% to $166.4 million, driven by COVID-19 testing revenues, higher international sales of OraQuick® HIV Self-Test, and increased laboratory services [349]. - The consolidated net loss for 2020 was $14.9 million, or $(0.22) per share, compared to a net income of $16.7 million, or $0.27 per share, in 2019 [350]. - Cash provided by operating activities decreased to $5.8 million in 2020 from $9.8 million in 2019 [351]. - Consolidated operating loss was $5.2 million in 2020, a decline from the operating income of $18.6 million in 2019, impacted by increased operating expenses related to COVID-19 product development [372]. Revenue Breakdown - The Diagnostics segment reported a revenue decline of 18% to $63.6 million, while the Molecular Solutions segment saw a 45% increase to $102.8 million [353]. - International sales accounted for 24% of total net revenues in 2020, down from 31% in 2019, totaling $40.9 million [354]. - Domestic HIV revenues decreased 16% to $15.2 million in 2020 from $18.0 million in 2019, primarily due to a decline in domestic HIV testing caused by the COVID-19 pandemic [359]. - International HIV revenues increased 16% to $29.0 million in 2020 from $25.1 million in 2019, driven by higher sales of OraQuick® HIV Self-Test in Africa [360]. - Net revenues from the Molecular Solutions segment increased 45% to $102.8 million in 2020 from $70.8 million in 2019, with significant contributions from COVID-19 related products [366]. - Laboratory services revenues increased 41% to $9.6 million in 2020 compared to $6.8 million in 2019, attributed to the acquisition of Diversigen [368]. Cash and Financing - Cash and cash equivalents increased to $160.8 million in 2020 from $75.7 million in 2019, with total cash and available-for-sale securities rising to $257.1 million [385]. - Net cash provided by financing activities was $92.5 million in 2020, primarily from the issuance of common stock in a public offering [388]. - The company expects current cash balances to be sufficient to fund operating and capital needs, with $99.4 million or 39% of cash held by its Canadian subsidiary [390]. Acquisitions and Investments - The company completed a public offering in June 2020, raising approximately $95.0 million from the sale of 9,200,000 shares at $11.00 per share [347]. - The acquisition of UrSure was completed on July 22, 2020, for $3.0 million, aimed at expanding the product offerings in point-of-care tests [348]. Research and Development - Research and development expenses increased 75% to $21.3 million in 2020 from $12.2 million in 2019, largely due to COVID-19 product development [374]. - The company is developing a rapid COVID-19 antigen test and a laboratory-based oral fluid SARS-CoV-2 antibody test, seeking Emergency Use Authorization (EUA) [346]. Inventory and Deferred Revenue - As of December 31, 2020, deferred revenue included customer prepayments of $3.2 million, up from $1.9 million in 2019, indicating a growth in customer commitments [398]. - The company recorded inventory write-offs of $2.6 million in 2020, compared to $1.3 million in both 2019 and 2018, highlighting increasing quality and expiration issues [402]. Tax and Currency - Federal Net Operating Loss (NOL) carryforwards amounted to $136.3 million as of December 31, 2020, with net deferred tax assets of $35.4 million before valuation allowance [403]. - Sales denominated in foreign currencies accounted for 5.0% of total revenues for the year ended December 31, 2020, with foreign subsidiaries holding net assets of $161.5 million [410]. - A 10% unfavorable change in the Canadian-to-U.S. dollar and Euro-to-U.S. dollar exchange rates would have decreased comprehensive income by approximately $12.9 million in 2020 [410]. - The company maintains a full valuation allowance against U.S. deferred tax assets, indicating a cautious approach to realizing these assets [404]. Revenue Recognition - Revenue from product sales is recognized upon transfer of control, net of allowances for discounts or rebates, ensuring accurate revenue reporting [393]. - Service revenues, including microbiome laboratory testing, are recognized when performance obligations are satisfied, reflecting the company's commitment to service quality [395]. - Acquired businesses are accounted for using the acquisition method, with any excess purchase price recorded as goodwill, reflecting the company's strategic growth through acquisitions [406].