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/
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