GAITHERSBURG, Md., June 14 /PRNewswire-FirstCall/ -- BioVeris Corporation reported today its financial results for the quarter and year ended March 31, 2006 and filed its Annual Report on Form 10-K with the Securities and Exchange Commission.
BioVeris adopted FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46), as of March 31, 2004 based on a determination that Meso Scale Diagnostics, LLC. (MSD) qualified as a variable interest entity with the Company as the primary beneficiary. Accordingly, beginning as of March 31, 2004, the Company consolidated the financial information of MSD in its financial statements. In August 2004, the Company and MSD entered into a settlement agreement that resolved litigation between the parties and constituted a reconsideration event under FIN 46. The Company has determined that it no longer meets the conditions to be designated as the primary beneficiary of MSD, as certain provisions of the settlement agreement reallocated the obligation to absorb the majority of MSD's future expected losses. Accordingly, beginning August 12, 2004, the Company deconsolidated the financial results of MSD. The statement of operations for the year ended March 31, 2005 includes the consolidated revenue and expenses of MSD for the period from April 1, 2004 through August 12, 2004, and the year ended March 31, 2006 includes only the financial results of BioVeris and its wholly-owned subsidiaries.
BioVeris recorded revenues of $20.6 million for the fiscal year ended March 31, 2006, compared to $26.3 million for the last fiscal year. Of this $5.7 million decrease, $4.3 million represents MSD revenues which were consolidated with BioVeris' revenues during fiscal 2005. Revenues for the three months ended March 31, 2006 were $4.1 million, compared to $4.9 million for the same period in 2005.
Revenues include product sales of $3.6 million and $19.1 million during the three months and year ended March 31, 2006, respectively, compared to $4.6 million and $24.7 million for the same respective prior year periods. Of the $5.6 million decrease in fiscal year 2006, $4.0 million represents MSD product sales. BioVeris' sales of biosecurity products for fiscal 2006 were $8.6 million, a decrease of $800,000 from the prior year. Sales of products for the life science market were $10.5 million for fiscal 2006, a decrease of $800,000 from the prior year. These changes in product sales reflect the change of orders and product deliveries for biosecurity and life science products, which are based on customers' requirements.
Product costs were $2.1 million (57% of total product sales) for the three months ended March 31, 2006 compared to $2.2 million (47% of total product sales) in the corresponding prior year period. Product costs were $8.7 million (46% of total product sales) for the year ended March 31, 2006 compared to $12.9 million (52% of total product sales) in the corresponding prior year period. The current year decrease of $4.2 million consists of $3.7 million due to the consolidation of MSD's product costs, and a $500,000 reduction in Bioveris' costs. BioVeris' product costs in fiscal 2006, as a percentage of total product sales, were 46% compared to 44% in fiscal 2005.
Research and development expenses increased to $4.6 million for the three months ended March 31, 2006 from $4.3 million for the corresponding prior year period. Research and development expenses decreased to $17.7 million for the year ended March 31, 2006 from $21.5 million for the corresponding prior year period. The $3.8 million decrease in fiscal 2006 consists of $3.7 million due to the consolidation of MSD's research and development expenses, and a $100,000 reduction in BioVeris' costs. Research and development expenses primarily relate to ongoing development costs and product enhancements associated with vaccines, the M-SERIES family of products, development of new assays and research and development of new systems and technologies, including point-of-care products.
Selling, general and administrative expenses were $5.9 million for the three months ended March 31, 2006 compared to $6.5 million in the corresponding prior year period. Selling, general and administrative expenses were $24.7 million for the year ended March 31, 2006 compared to $32.2 million in the corresponding prior year period. The $7.5 million decrease in fiscal 2006 consists of $4.5 million due to the consolidation of MSD's selling, general and administrative expenses, and a $3.0 million reduction in BioVeris' costs. BioVeris' decrease in selling, general and administrative costs was primarily attributable to lower professional fees in the current year.
BioVeris' net loss for the three months ended March 31, 2006 was $7.2 million ($0.27 per common share), compared to a net loss of $7.1 million ($0.27 per common share) in the corresponding prior year period. BioVeris' net loss for the year ended March 31, 2006 was $27.9 million ($1.04 per common share), compared to a net loss of $77.6 million ($2.90 per common share) in the corresponding prior year period.
At March 31, 2006, the Company had cash, cash equivalents and short-term investments of $69.6 million.
BioVeris Corporation is a global integrated health care company developing proprietary technologies in diagnostics and vaccinology. The Company is dedicated to the development and commercialization of innovative products and services for healthcare providers, their patients and their communities. BioVeris is headquartered in Gaithersburg, Maryland. More information about the Company can be found at http://www.bioveris.com/.
This press release contains forward-looking statements within the meaning of the federal securities laws that relate to future events or BioVeris' future financial performance. All statements in this press release that are not historical facts, including any statements about consolidation of future financial information and future financial or operational plans are hereby identified as "forward-looking statements." The words "may," "should," "will," "expect," "could," "anticipate," "believe," "estimate," "plan," "intend" and similar expressions have been used to identify certain of the forward-looking statements. In this press release, BioVeris has based these forward-looking statements on management's current expectations, estimates and projections and they are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various important factors, including changes in BioVeris' strategy and business plans; BioVeris' ability to develop and introduce new or enhanced products; BioVeris' ability to enter into new collaborations on favorable terms, if at all; and changes in general economic, business and industry conditions. The foregoing sets forth some, but not all, of the factors that could impact upon BioVeris' ability to achieve results described in any forward-looking statements. A more complete description of the risks applicable to BioVeris is provided in the Company's filings with the SEC available at the SEC's web site at http://www.sec.gov/. Investors are cautioned not to place undue reliance on these forward-looking statements. Investors also should understand that it is not possible to predict or identify all risk factors and that neither this list nor the factors identified in BioVeris' SEC filings should be considered a complete statement of all potential risks and uncertainties. BioVeris has no obligation to publicly update or release any revisions to these forward- looking statements to reflect events or circumstances after the date of this press release.
(Financial data follows.)
BioVeris Corporation
Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
March 31, March 31,
2006 2005 2006 2005
REVENUES:
Product sales $3,634 $4,618 $19,054 $24,662
Royalty income 477 286 1,561 1,249
Contract fees - - - 388
Total 4,111 4,904 20,615 26,299
OPERATING COSTS AND
EXPENSES:
Product costs 2,081 2,159 8,706 12,860
Research and development 4,559 4,290 17,695 21,485
Selling, general, and
administrative 5,872 6,494 24,688 32,212
Total 12,512 12,943 51,089 66,557
LOSS FROM OPERATIONS (8,401) (8,039) (30,474) (40,258)
INTEREST INCOME 1,167 997 3,851 3,191
OTHER, NET 62 (385) (1,230) 95
LOSS ON JOINT VENTURE
IMPAIRMENTS - 2,033 - (35,077)
EQUITY IN LOSS OF
JOINT VENTURE - (1,736) - (5,524)
NET LOSS $(7,172) $(7,130) $(27,853) $(77,573)
Net loss per common
share (basic and
diluted) $(0.27) $(0.27) $(1.04) $(2.90)
COMMON SHARES
OUTSTANDING (basic
and diluted) 26,862 26,728 26,810 26,728
BioVeris Corporation
Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
March 31,
2006 2005
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $29,693 $41,739
Short-term investments 39,938 53,890
Accounts receivable, net 3,360 4,483
Inventory 5,429 5,235
Other current assets 2,508 2,813
Total current assets 80,928 108,160
Equipment and leasehold
improvements, net 3,456 3,636
OTHER NONCURRENT ASSETS:
Note receivable 5,666 4,709
Technology licenses 15,356 17,306
Other 447 354
TOTAL ASSETS $105,853 $134,165
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $5,362 $6,457
Accrued wages and benefits 1,862 1,713
Other current liabilities 1,520 1,351
Total current liabilities 8,744 9,521
NONCURRENT DEFERRED LIABILITIES 546 1,890
Total liabilities 9,290 11,411
COMMITMENTS (see Note 6) and CONTINGENCIES
MINORITY INTEREST - -
SERIES B PREFERRED STOCK, 1,000 shares
designated, issued and outstanding 7,500 7,500
STOCKHOLDERS' EQUITY:
Preferred stock, par value $0.01
per share, 15,000,000 shares
authorized, issuable in series:
Series A, 600,000 shares
designated, none issued - -
Common stock, par value $0.001
per share, 100,000,000 shares
authorized, 27,238,000 and 26,728,000
shares issued and outstanding 27 27
Additional paid-in capital 205,997 203,464
Deferred compensation (1,688) -
Accumulated other comprehensive loss (128) (999)
Accumulated deficit (115,145) (87,238)
Total stockholders' equity 89,063 115,254
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $105,853 $134,165
BioVeris Corporation
Supplemental Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)
Year Ended
March 31, 2006 Year Ended March 31, 2005
BioVeris and BioVeris and
Wholly-Owned Wholly-Owned Consolidating
Subsidiaries Subsidiaries MSD Eliminations Consolidated
(In thousands, except per share data)
Revenues:
Product sales $19,054 $20,703 $3,959 $- $24,662
Royalty income 1,561 1,249 - - 1,249
Contract fees 32 356 - 388
Total 20,615 21,984 4,315 - 26,299
Operating costs
and expenses:
Product costs 8,706 9,167 3,693 - 12,860
Research and
development 17,695 17,877 3,705 (97) 21,485
Selling,
general and
administrative 24,688 27,710 4,502 - 32,212
Total
operating
costs and
expenses 51,089 54,754 11,900 (97) 66,557
Loss from
operations (30,474) (32,770) (7,585) 97 (40,258)
Interest income 3,851 3,111 80 - 3,191
Other, net (1,230) 95 - - 95
Loss on joint
venture
impairments - (35,077) - - (35,077)
Equity in loss
of joint
venture - (12,932) - 7,408 (5,524)
Net loss $(27,853) $(77,573) $(7,505) $7,505 $(77,573)
Net loss per
common share
(basic and
diluted) $(1.04) $(2.90) $(0.28) $0.28 $(2.90)
Shares used in
computing net
loss per common
share 26,810 26,728 26,728 26,728 26,728
