TOX Medtox Scientfic

MEDTOX Scientific, Inc. (AMEX:TOX) announced today results for the third quarter ended September 30, 2005. -- Revenues increased $2,040,000 to $16,513,000, or 14% -- Consolidated gross margin increased to 44% from 42% -- Operating Income increased $407,000 to $1,688,000, or 32% -- Net Income increased $256,000 to $825,000, or 45% For the three-month period ended September 30, 2005, revenues increased to $16,513,000 compared to $14,473,000 from the prior-year period. Operating income increased to $1,688,000 compared to $1,281,000 from the prior-year period. The Company recorded net income of $825,000, or $0.10 per diluted share, compared to net income of $569,000, or $0.07 per diluted share, or a 45% increase in net income from the comparable period last year. For the nine-month period ended September 30, 2005, revenues increased to $48,047,000 compared to $43,120,000, or 11%, from the prior-year period. Operating income increased to $4,650,000 compared to $3,887,000, or 20%, from the comparable period last year. Net income increased to $2,261,000, or $0.28 per diluted share, compared to net income of $1,711,000, or $0.22 per diluted share, or an increase of 32% in net income from the comparable period last year. Overall, expenses for the quarter were in line with expectations. Total selling, general and administrative expenses for the quarter were 30% of revenues which is comparable with the same period last year. Research and development expenses increased 56% to $552,000 for the quarter from $354,000 in the comparable period last year. MEDTOX will hold a teleconference to discuss third quarter 2005 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 October 17 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 www.medtox.com. An audio replay of the conference call will be available through October 24 at 800-642-1687 conference ID #9647412. International callers may access the replay at 706-645-9291 with the same conference ID #9647412. MEDTOX Scientific, Inc., headquartered in St. Paul, Minn., is a provider of high quality specialized laboratory testing services and on-site/point-of-collection (POC) devices. The company also supports customers with complete logistics, data and program management services. 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. 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. For more information see 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 in the Company's 2004 Annual Report on Form 10-K. -0- *T MEDTOX SCIENTIFIC, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 ---------- ---------- ---------- ---------- REVENUES: Laboratory services $12,740 $10,979 $36,808 $32,694 Product sales 3,773 3,494 11,239 10,426 ---------- ---------- ---------- ---------- 16,513 14,473 48,047 43,120 COST OF REVENUES: Cost of services 7,783 7,055 22,758 20,638 Cost of sales 1,470 1,386 4,587 4,096 ---------- ---------- ---------- ---------- 9,253 8,441 27,345 24,734 ---------- ---------- ---------- ---------- GROSS PROFIT 7,260 6,032 20,702 18,386 OPERATING EXPENSES: Selling, general and administrative 5,020 4,397 14,264 13,310 Research and development 552 354 1,788 1,189 ---------- ---------- ---------- ---------- 5,572 4,751 16,052 14,499 ---------- ---------- ---------- ---------- INCOME FROM OPERATIONS 1,688 1,281 4,650 3,887 OTHER INCOME (EXPENSE): Interest expense (182) (264) (620) (790) Other expense, net (175) (99) (383) (337) ---------- ---------- ---------- ---------- (357) (363) (1,003) (1,127) ---------- ---------- ---------- ---------- INCOME BEFORE INCOME TAX EXPENSE 1,331 918 3,647 2,760 INCOME TAX EXPENSE (506) (349) (1,386) (1,049) ---------- ---------- ---------- ---------- NET INCOME $825 $569 $2,261 $1,711 ========== ========== ========== ========== BASIC EARNINGS PER COMMON SHARE $0.10 $0.08 $0.30 $0.23 ========== ========== ========== ========== DILUTED EARNINGS PER COMMON SHARE $0.10 $0.07 $0.28 $0.22 ========== ========== ========== ========== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: Basic 7,896,777 7,444,973 7,662,716 7,451,174 Diluted 8,324,880 7,930,347 8,094,210 7,806,901 MEDTOX SCIENTIFIC, INC. CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) September 30, December 31, 2005 2004 ------------- ------------ ASSETS Cash and cash equivalents $674 $263 Accounts receivable 11,011 8,287 Inventories 3,074 3,624 Other current assets 2,504 2,824 ------------- ------------ Total current assets 17,263 14,998 Building, equipment and improvements, net 17,753 16,348 Other assets 23,073 24,614 ------------- ------------ Total assets $58,089 $55,960 ============= ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $8,616 $12,081 Long-term obligations 5,845 6,090 Stockholders' equity 43,628 37,789 ------------- ------------ Total liabilities and stockholders' equity $58,089 $55,960 ============= ============ *T