EX-99 2 ex99-1030106.htm EXHIBIT 99.1

Exhibit 99.1

MEDTOX Scientific, Inc.

402 West County Road D

St. Paul, MN 55112

Contact: Paula Perry (877) 715-7236

 

FOR IMMEDIATE RELEASE

 

MEDTOX SCIENTIFIC ANNOUNCES RESULTS

FOR FOURTH QUARTER AND YEAR-END

 

ST. PAUL, March 1, 2006 – MEDTOX Scientific, Inc. (Nasdaq:MTOX) today announced fourth quarter and year-end results for the periods ending December 31, 2005. For the year ended December 31, 2005:

Revenues increased $6.3 million to $63.0 million, or 11.1%

Consolidated gross margin increased to 43.0% from 42.0%

Gross profit increased $3.3 million to $27.1 million, or 13.8%

Operating income increased to $5.5 million from the prior-year $4.3 million, or 28.4%

Income before income taxes increased to $4.2 million from the prior-year $2.9 million, or 43.2%

Net income increased to $3.3 million from the prior-year $1.8 million, or 82.2%

For the three-month period, revenues were $15,000,000, compared to $13,616,000 from the prior-year period. The Company recorded operating income of $874,000 for the three-month period, compared to $416,000 for the prior-year period. The Company recorded net income of $1,057,000 for the three-month period compared to $110,000 for the prior-year period. For the twelve month period, revenues were $63,047,000 compared to $56,736,000 for the prior-year period. The Company recorded operating income of $5,524,000 for the twelve-month period compared to $4,303,000 for the prior-year period. The Company recorded net income of $3,318,000 for 2005 compared to $1,821,000 for the prior-year period.

The Company recorded a $499,000 net tax benefit as part of fourth quarter earnings. The income tax benefit was primarily the result of the reduction of the valuation allowance on deferred tax assets.

 

 



 

 

Margins continue to improve. Total operating expenses as a percentage of sales decreased slightly to 34.3% for the year, compared to 34.4% for the prior year. The Company’s balance sheet also continues to improve with a reduction in the revolving line of credit balance and the continued repayment of long-term debt. Also, the Company made capital expenditures of $4.1 million during the year, substantially financed from internally generated cash.

MEDTOX will hold a teleconference to discuss fourth quarter 2005 results today at 9:30 a.m. Central Time (10:30 a.m. Eastern). The Company will discuss these results and other corporate matters. During the conference call the Company may discuss and answer questions concerning business and financial developments and trends. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been previously disclosed. Dialing 800-387-5648 a few minutes prior to the scheduled start time on March 1 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 under “webcasts” at www.medtox.com. An audio replay of the conference call will be available through March 8 at 800-642-1687 conference ID # 5335103. International callers may access the replay at 706-645-9291 with the same conference ID # 5335103.

MEDTOX Scientific, Inc., headquartered in St. Paul, Minn., is a provider of high quality specialized laboratory testing services and on-site/point-of-collection testing (POCT) 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 and incorporated herein by reference.

 

2

 



 

 

MEDTOX SCIENTIFIC, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31,

 

December 31,

 

 

2005

 

2004

 

2005

 

2004

 

REVENUES:

 

 

 

 

 

 

 

 

Laboratory services

$ 11,774

 

$ 10,525

 

$ 48,582

 

$ 43,219

 

Product sales

3,226

 

3,091

 

14,465

 

13,517

 

 

15,000

 

13,616

 

63,047

 

56,736

 

COST OF REVENUES:

 

 

 

 

 

 

 

 

Cost of services

7,353

 

6,973

 

30,111

 

27,611

 

Cost of sales

1,229

 

1,195

 

5,816

 

5,291

 

 

8,582

 

8,168

 

35,927

 

32,902

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

6,418

 

5,448

 

27,120

 

23,834

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Selling, general and administrative

5,045

 

4,516

 

19,309

 

17,826

 

Research and development

499

 

516

 

2,287

 

1,705

 

 

5,544

 

5,032

 

21,596

 

19,531

 

 

 

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

874

 

416

 

5,524

 

4,303

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

Interest expense

(196

)

(207

)

(816

)

(997

)

Other expense, net

(120

)

(32

)

(503

)

(369

)

 

(316

)

(239

)

(1,319

)

(1,366

)

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX BENEFIT (EXPENSE)

558

 

177

 

4,205

 

2,937

 

 

 

 

 

 

 

 

 

 

INCOME TAX BENEFIT (EXPENSE)

499

 

(67

)

(887

)

(1,116

)

 

 

 

 

 

 

 

 

 

NET INCOME

$ 1,057

 

$ 110

 

$ 3,318

 

$ 1,821

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS PER COMMON SHARE

$ 0.13

 

$ 0.01

 

$ 0.43

 

$ 0.24

 

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER COMMON SHARE

$ 0.12

 

$ 0.01

 

$ 0.40

 

$ 0.23

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

Basic

8,148,010

 

7,533,190

 

7,785,037

 

7,471,847

 

Diluted

8,543,586

 

8,130,956

 

8,199,650

 

7,853,916

 

 

3

 



 

 

MEDTOX SCIENTIFIC, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

December 31,

2005

 

December 31,

2004

 

ASSETS

 

 

 

 

Cash and cash equivalents

$ 1,312

 

$      263

 

Accounts receivable

9,889

 

8,287

 

Inventories

3,301

 

3,624

 

Other current assets

2,627

 

2,824

 

Total current assets

17,129

 

14,998

 

 

 

 

 

 

Building, equipment and improvements, net

17,927

 

16,348

 

 

 

 

 

 

Other assets

24,334

 

24,614

 

Total assets

$ 59,390

 

$ 55,960

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities

$ 8,752

 

$ 12,081

 

 

 

 

 

 

Long-term obligations

5,793

 

6,090

 

 

 

 

 

 

Stockholders’ equity

44,845

 

37,789

 

Total liabilities and stockholders’ equity

$ 59,390

 

$ 55,960

 

 

 

 

 

 

 

 

 

4