Sales gains 19.4% in its core network marketing business - Net Loss from
Continuing Operations totalled $2.7 Million, due to Marketing and Sales
investments
VAUDREUIL-DORION, QC,
For the year ended
"Although more expensive than we had originally planned, our new compensation program did drive significant growth in recruitment of new distributors and customers", said James A. Northrop, President and CEO of Immunotec Inc. "Most fundamentally, and most critically for our future, we established our presence across
Fiscal 2009 Financial Results Highlights:
- Network Revenues reached $37.9M in 2009 compared to $31.8 in 2008,
a $6.1M or 19.4% increase.
- Other Revenues that include international distribution revenues,
freight and shipping, charge backs and educational material reached
$6.8M in 2009 compared to $6.3M in 2008, a $0.5M or 8% increase.
- Canada remained the biggest segment at $21.1M in total revenues with
an increase of 11% over the preceding year. Growing to nearly match
Canada, the United States achieved $20.0M in total revenues
representing a 30% increase over the preceding year. Revenues from
other countries of $ 3.6M remained stable year over year.
- Sales incentives and commissions as a result of the introduction of
the new compensation plan reached 53% on average for the 2009 period,
compared to 49% for 2008.
- Expenses defined as being the cumulative amounts of Administration,
Marketing, Sales, Quality Control and Research & Development expenses
were $12.9M for 2009 representing 29% of total revenues and stable as
a percentage of total revenues over last year of $10.5M or 28% for
2008.
- The Company reorganized its operations and downsized its corporate
overhead during the fourth quarter resulting in a onetime, non-
recurrent charge of $0.4M.
- The Company closed, in July 2009, the operations of its subsidiary
located in South Korea because of an Executory Preliminary Injunction
launched against Immunotec Korea Inc. The net operating loss incurred
from March 20, 2009 to October 31, 2009 from the operations related
to South Korea amounted to $2.1M, net of future income tax of $0.2M
and have been recorded during the year.
- Net loss from continuing operations for the year ended October 31 of
2009 of $2.7 million, or $0.038 per diluted share, compared to net
earnings from continuing operations of $0.9 million, or $0.013 per
diluted share for the same period of 2008. Immunotec's net loss for
the year end of 2009 was $4.5 million, or $0.065 per diluted share,
compared to net earnings of $0.9 million, or $0.013 per diluted share
for the last year. The additional decrease in net earnings is
predominantly due to the loss experienced in closing the South Korean
operations, the decrease in operating margins created from the
introduction of the new compensation plan and a provision on
impairment of other assets.
About Immunotec Inc.
Immunotec is a Network Marketing Company involved in the direct selling of scientifically validated natural health products and dietary supplements. The Company offers a lucrative business opportunity to its independent distributors. This business model provides Immunotec's network of people with an opportunity to earn a steady and recurring income, directly based on their level of involvement and performance. Individual distributors build their business by conveying product information and selling product to customers and by building teams of distributors to expand geographic penetration and market coverage to larger populations of customers.
Headquartered with manufacturing facilities near
The Company files its consolidated financial statements, its management and discussion analysis report, its press releases and such other required documents on the SEDAR database at www.sedar.com and on the Company's website at www.immunotec.com. The common shares of the Company are listed on the TSX Venture Exchange under the ticker symbol IMM.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For information identifying known risks and uncertainties and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the heading Risks and Uncertainties in Immunotec's most recent Management's Discussion and Analysis, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.
"The TSX Venture does not accept responsibility for the adequacy or accuracy of this release."
Consolidated Balance Sheets
As at October 31 2009 2008
$ $
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ASSETS
Current
Cash 2,262,821 6,138,454
Accounts receivable 201,841 812,914
Income taxes receivable 70,306 118,692
Inventories 3,941,847 2,979,230
Prepaid expenses 436,251 548,333
Future income taxes 90,133 1,037,000
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7,003,199 11,634,623
Long-term
Property, plant and equipment 6,068,313 6,210,788
Intangible assets 2,505,937 2,527,596
Goodwill 499,541 499,541
Future income taxes 1,969,403 551,967
Other assets 699,839 1,238,885
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18,746,232 22,663,400
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 2,629,247 2,739,945
Accrued liabilities 1,881,390 1,503,969
Customer deposits 308,557 261,735
Income taxes payable - 46,538
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4,819,194 4,552,187
Shareholders' Equity (Deficit)
Share capital 3,465,548 3,465,548
Other equity - Stock options 1,770,093 1,414,885
Contributed surplus 11,337,796 11,332,143
(Deficit) Retained earnings (2,646,399) 1,898,637
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13,927,038 18,111,213
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18,746,232 22,663,400
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Consolidated Statements of Changes in
Shareholders' Equity (Deficit)
Number of
common
shares
-----------
Balance -
October
31,
2007 69,994,300
-----------
Net
earnings -
Stock-
based
compen-
sation
(note 11) -
-----------
Balance -
October
31,
2008 69,994,300
-----------
Net loss
Stock-
based
compen-
sation
(note 11)
-----------
Balance -
October
31,
2009 69,994,300
-----------
Other
equity Con- (Deficit)
Share -Stock tributed Retained
capital options surplus earnings Total
$ $ $ $ $
---------------------------------------------------------------
Balance -
October
31,
2007 3,465,548 736,416 11,326,406 956,836 16,485,206
---------------------------------------------------------------
Net
earnings - - - 941,801 941,801
Stock-
based
compen-
sation
(note 11) - 678,469 5,737 - 684,206
---------------------------------------------------------------
Balance -
October
31,
2008 3,465,548 1,414,885 11,332,143 1,898,637 18,111,213
---------------------------------------------------------------
Net loss (4,545,036) (4,545,036)
Stock-
based
compen-
sation
(note 11) 355,208 5,653 360,861
---------------------------------------------------------------
Balance -
October
31,
2009 3,465,548 1,770,093 11,337,796 (2,646,399) 13,927,038
---------------------------------------------------------------
Consolidated Statements of (Loss) Income
and Comprehensive Income
Years ended October 31 2009 2008
$ $
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REVENUES
Network sales 37,909,574 31,757,078
Other revenue 6,815,130 6,303,316
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44,724,704 38,060,394
VARIABLE COSTS
Cost of goods sold (excluding amortization) 7,996,599 6,346,411
Sales incentives - Network 20,241,290 15,434,576
Other variable costs 4,154,662 3,228,664
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Margin before expenses 12,332,153 13,050,743
-------------------------------------------------------------------------
Expenses
Administrative 6,870,331 5,839,084
Marketing and Selling 5,096,634 3,839,729
Quality and Development costs 946,790 806,842
Amortization 1,079,729 1,044,053
Financial charges (revenues) 36,099 (80,771)
Impairment on other asset 736,000 -
Restructuring charges 437,805 -
-------------------------------------------------------------------------
15,203,388 11,448,937
-------------------------------------------------------------------------
(Loss) Earnings from continuing operations
before income taxes (2,871,235) 1,601,806
(Recovery of) Income taxes
Current 39,789 58,949
Future (236,677) 601,056
-------------------------------------------------------------------------
(Loss) Earnings from continued operations (2,674,347) 941,801
Loss from discontinued operations (1,870,689) -
-------------------------------------------------------------------------
Net (loss) earnings and comprehensive
(loss) income (4,545,036) 941,801
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic Net (loss) earnings per share
Continuing operations (0.038) 0.013
Discontinued operations (0.027) -
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Total basic net (loss) earnings per share (0.065) 0.013
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Diluted Net (loss) earnings per share
Continuing operations (0.038) 0.013
Discontinued operations (0.027) -
-------------------------------------------------------------------------
Total diluted net (loss) earnings per share (0.065) 0.013
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of common shares
outstanding during the period (note 14)
Basic 69,994,300 69,994,300
Diluted 69,994,300 70,034,549
Consolidated Statement of Cash Flows
2009 2008
Years ended October 31 $ $
-------------------------------------------------------------------------
Operating activities
Net (loss) earnings and comprehensive
(loss) income (4,545,036) 941,801
Loss from discontinued operations (1,870,689) -
-------------------------------------------------------------------------
(Loss) from continuing operations (2,674,347) 941,801
Add (deduct) non cash items:
----------------------------
Amortization of property, plant and
equipment 537,881 547,430
Amortization of intangible assets 541,848 496,623
Net gain on disposal of property, plant
and equipment and intangible assets (46,232) -
Impairment on other asset 736,000 -
Future income taxes (236,677) 601,056
Stock-based compensation 360,861 684,206
-------------------------------------------------------------------------
Cash (used) received prior to working
capital variation (780,666) 3,271,116
Net change in non-cash working capital 73,824 (151,040)
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Cash (used) received in operating activities (706,842) 3,120,076
-------------------------------------------------------------------------
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Investing activities
Additions to property, plant and
equipment (873,752) (142,771)
Additions to intangible assets (520,211) (601,959)
Proceeds from disposal of property,
plant and equipment 524,600 -
Research and development tax credits - (111,450)
Other receivable (196,954) -
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Cash used in investing activities (1,066,317) (856,180)
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Net (decrease) increase in cash from
continuing activities (1,773,159) 2,263,896
Net (decrease) in cash from discontinued
activities
Operating activities (1,970,623) -
Investing activities (131,851) -
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(2,102,474) -
Net (decrease) increase in cash during
the year (3,875,633) 2,263,896
Cash at the beginning of year 6,138,454 3,874,558
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Cash at the end of year 2,262,821 6,138,454
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For further information: Patrick Montpetit, Chief Financial Officer, (450) 510-4527
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