Cholestech reports break-even fourth fiscal quarter; Gross profit more than doubles.HAYWARD, Calif.--(BW HealthWire)--April 30, 1997--Cholestech Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CTEC CTEC Course and Teacher Evaluation Council (Northwestern University, Office of the Register) CTEC Certified Technical Education Center CTEC Certified Technical Education Center (Microsoft) ) today reported the company achieved break-even results in the fourth fiscal quarter of 1997, ended March 28, 1997. This compares with a net loss of $753,000, or $.09 per share, posted in the same quarter a year ago. Revenues for the quarter reached $3.9 million, a 67 percent increase over the $2.3 million recorded in the fourth quarter of fiscal 1996. The company's performance was enhanced by continuing improvement in gross margin. In the current quarter, the company more than doubled gross profit to $1.9 million, or 48 percent of revenues, compared with $718,000, or 31 percent of revenues, posted in the fourth quarter of 1996. Revenues for the fiscal year ended March 28, 1997 were $12.9 million, an 87 percent increase over the $6.9 million reported in fiscal 1996. Gross margins improved significantly throughout the year and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. grew at less than half the rate of revenue. These factors were responsible for significantly narrowing Cholestech's net loss for the year to $809,000, or $.08 per share, compared with a loss of $2.7 million, or $.34 per share, in fiscal 1996. For fiscal year 1997, gross profit reached $5.9 million, or 46 percent of revenues, compared with $2.4 million, or 34 percent of revenues in fiscal 1996. "We are very pleased with the progress made this year," said Warren E. Pinckert II, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Cholestech. "Our stated goals were to continue to grow our health promotion business, launch into the physician office lab market, and leverage our technology. We achieved what we set out to do. We are now approaching our goal of sustainable profitability." Cholestech's revenues are derived from the manufacturing and marketing of its proprietary Cholestech L.D.X(R) System, a telephone-sized device which employs a single-use state of the art disposable cassette A removable magnetic tape storage module that contains supply and takeup reels (hubs) in the same housing. Most audio tapes and videotapes use cassettes as well as backup tape technologies such as DAT, 8mm and Magstar MP (see below). to perform multiple tests from a single drop of whole blood. The system has been shown to provide results -- in less than five minutes -- that are as accurate as similar tests performed in clinical and hospital labs. It is currently the only multi-analyte system that is waived under the Clinical Laboratory Improvement Amendments Clinical Laboratory Improvement Amendments (CLIA) of 1988 are United States federal regulatory standards that apply to all clinical laboratory testing performed on humans in the United States, except clinical trials and basic research. (CLIA CLIA Clinical Laboratory Improvement Amendments of 1988 Congressional legislation that promulgated quality assurance practices in clinical labs, and required them to measure performance at each step of the testing process from the beginning to the end-point of a ) of 1988, meaning that it can be operated reliably by anyone without requiring specific medical training. During the year, the company leveraged its technology by signing an agreement with Metra Biosystems (NASDAQ:MTRA MTRA Monster Truck Racing Association MTRA Money Transmitter Regulators Association MTRA Medical Technical Research Associates (San Bruno, CA) MTRA Medizinisch Technische Radiologie Assistentinnen ) to develop and market a cassette for the Cholestech L.D.X System to assess bone resorption Bone resorption is the process by which osteoclasts break down bone and release the minerals, resulting in a transfer of calcium from bone fluid to the blood. The osteoclasts are multi-nucleated cells that contain numerous mitochondria and lysosomes. . Cholestech also received a grant from the National Diabetes and Kidney Disease Kidney Disease Definition Kidney disease is a general term for any damage that reduces the functioning of the kidney. Kidney disease is also called renal disease. Advisory Council of the National Institutes of Health (NIH "Not invented here." See digispeak. NIH - The United States National Institutes of Health. ) for research related to developing a single test disposable cassette to measure glycated hemoglobin hemoglobin (hē`məglō'bĭn), respiratory protein found in the red blood cells (erythrocytes) of all vertebrates and some invertebrates. , a valuable tool in the treatment of diabetes. The Cholestech L.D.X System currently provides diagnostic screening and therapeutic monitoring of cholesterol and glucose levels. Shortly after the close of the quarter, the company announced two distribution agreements intended to broaden the market reach of the Cholestech L.D.X System. AmeriSource Health Corp. (NYSE NYSE See: New York Stock Exchange :AAS) signed a multi-year agreement to distribute the Cholestech L.D.X(R) System to pharmacies nationwide and Health Management Systems Corp. signed a two year agreement to use the Cholestech L.D.X System to screen cholesterol levels of individuals at Wal-Mart (NYSE:WMT (Windows Media Technologies) See Windows Media. ) stores across the country. "Our initial target, health promotion, remains the primary driver of our growth," Pinckert said. "Going forward, we intend to leverage the opportunity provided by the Wal-Mart agreement to further develop this market. We began selling to physician office labs in 1997 and by the end of the fourth quarter, were generating almost 20 percent of our revenues from these customers. Our goal in the pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. market was to prepare for launch into pharmacies in fiscal 1998. That launch will be enhanced by our distribution agreement with AmeriSource. We believe as we enter fiscal 1998 we are well positioned for continued growth in all our markets." Cholestech Corp. manufactures and markets a proprietary system to healthcare and disease management professionals. The Cholestech L.D.X System is positioned to benefit from increasing emphasis on preventative health care and disease management. Cholestech's portfolio of CLIA-waived products is designed to offer efficient and economic screening and monitoring options which will ultimately enable people to lead longer, healthier and more active lives. Except for the historical information contained herein, the matters discussed in this press release are forward looking statements, the accuracy of which is necessarily subject to risks and uncertainties. Actual results may differ significantly from results discussed in the forward looking statements. Actual results may be affected by factors set forth from time to time in the company's Securities and Exchange Commission filings including the company's Registration Statement on Form S-1 and prospectus dated June 28, 1996 and the company's Form 10-Q Form 10-Q See 10-Q. for the quarter ended December 27, 1996. -0-
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
Thirteen weeks ended Fifty-two weeks ended
3/28/97 3/29/96 3/28/97 3/29/96
(unaudited) (audited)
Net revenues:
Domestic $ 3,525 $ 1,947 $ 11,610 $ 5,548
International 351 376 1,251 1,325
-------- -------- -------- --------
3,876 2,323 12,861 6,873
Cost of products sold 2,021 1,605 6,952 4,505
Gross profit 1,855 718 5,909 2,368
Operating expenses:
Sales and marketing 1,033 962 3,891 3,168
Research and
development 436 175 1,254 714
General and
administrative 472 323 1,846 1,376
Total operating expenses 1,941 1,460 6,991 5,258
Loss from operations (86) (742) (1,082) (2,890)
Interest income 90 48 517 284
Interest expense (2) (59) (244) (140)
Net income (loss) $ 2 $ (753) $ (809) $ (2,746)
Net income (loss)
per share $ .00 $ (0.09) $ (0.08) $ (0.34)
Weighted average
common shares 11,422,845 8,103,565 10,381,914 8,041,531
CONTACT: Cholestech Corp. Andrea Tiller, 510/732-7200 (Chief Financial Officer) Lola Moenich, 510/293-8096 (Investor Relations Investor relations The process by which the corporation communicates with its investors. ) lmoenich@aol.com www.cholestech.com |
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