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Chembio Diagnostics Reports First Quarter 2013 Financial Results

Stocks in this article: CEMI

MEDFORD, N.Y., May 9, 2013 (GLOBE NEWSWIRE) -- Chembio Diagnostics, Inc. (Nasdaq:CEMI), a leader in point-of-care diagnostic tests for infectious diseases, today reported financial results for the three months ended March 31, 2013.

Financial highlights for the 2013 first quarter include the following (all comparisons are with the 2012 first quarter):

  • Total revenues of $6.68 million, up 0.4% compared with $6.65 million
  • Product sales of $6.31 million, down 0.8% compared with $6.36 million
  • Operating income of $487,000, compared with operating income of $720,000
  • Net income of $317,000 or $0.04 per diluted share, compared with net income of $433,000 or $0.05 per diluted share

Commenting on the Company's financial performance, Lawrence Siebert, Chembio's Chief Executive Officer, said, "Strong growth in sales of lateral flow HIV tests to South America outside Brazil and to our U.S. marketing partner Alere were offset by declines in sales of Dual Path Platform ® ("DPP") products to FIOCRUZ in Brazil. Moving forward we will continue efforts to realize additional sales to replace reduced revenue from FIOCRUZ that we currently anticipate.

"We are optimistic for continued growth of our lateral flow HIV tests in 2013 by Alere, as the U.S. Preventive Services Task Force reported its final recommendations on April 30, 2013 calling for the routine HIV testing of all people between the ages of 15 and 65. These guidelines fully embrace the routine testing that the Centers for Disease Control and Prevention has been recommending since 2006. The new recommendations should catalyze demand for HIV testing, especially as the Affordable Care Act is implemented and there will be no co-pay required for this preventive service, given the 'A' rating that has been indicated.

"Our DPP ® HIV 1/2 Assay ("DPP ® HIV"), for use with oral fluid or blood samples, received U.S. Food and Drug Administration ("FDA") approval in December 2012. We are now focused on completing the requirements for a Clinical Laboratory Improvement Act ("CLIA") waiver for this product in order to enable sales to the point-of-care market segments where these tests are primarily used. We expect to submit the CLIA waiver application to the FDA this July. Our commercial strategy to address the public health market for DPP ® HIV will feature a small direct sales organization, complemented by distributors to reach the hospital and physician office market.  We are increasingly optimistic that, in the future, this sales organization will be able to market our DPP ® Syphilis Screen & Confirm and DPP ® HIV-Syphilis multiplex tests by mid-2014, and our Hepatitis-C test in 2015, based upon positive regulatory determinations.

"We are actively developing new revenue opportunities in a number of international markets, including, but not limited to Brazil, with current and new international distribution partners for our DPP ® HIV-Syphilis test, as well as for our FDA approved lateral flow HIV tests. We are optimistic that these new revenue opportunities will offset lower sales to FIOCRUZ in 2013 and look forward to reporting on these initiatives as they develop," concluded Mr. Siebert.

First Quarter Results

Total revenues for the first quarter of 2013 of $6.68 million were up less than 1% compared with total revenues of $6.65 million in the prior-year period. Product sales in the 2013 first quarter of $6.31 million were down less than 1% compared with product sales of $6.63 in the prior-year period, primarily due to strong sales of lateral flow technology products in South America and the U.S., offset by declines in DPP ® product sales in Brazil to FIOCRUZ. Research and development ("R&D"), milestone, grant and royalty revenues for the three months ended March 31, 2013 increased to $365,000 from $290,000 in the prior-year period.

Gross profit for the 2013 first quarter decreased 19% to $2.69 million compared with $3.33 million for the prior-year period, due primarily to a product mix resulting in a higher cost of products sold. Product gross profit for the first quarter of 2013 decreased 23% to $2.33 million, from $3.04 million in the prior-year period, and product gross margin also declined primarily due to product mix.

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