WEST BRIDGEWATER, Mass., Feb. 25 /PRNewswire/ -- Boston Biomedica, Inc. (Nasdaq: BBII) today announced that revenue for the year ended December 31, 1998 increased to a record $26,081,076, an increase of $3,781,739 or 17%, compared with revenue of $22,299,337 for 1997. The Company also reported a net loss for the year ended December 31, 1998 of $(4,388,719), or $(0.94) per diluted share, compared with net income of $1,004,834, or $0.21, per diluted share in 1997.
For the fourth quarter ended December 31, 1998, the Company reported revenue of $7,244,191, a 1% decrease compared with revenue of $7,301,551 for the same period in 1997. The Company also reported a net loss for the quarter of $(501,270), or $(0.11) per diluted share, compared with net income of $435,237, or $0.09 per diluted share, for the previous year's fourth quarter.
Results for the year were adversely impacted by the Company's two previously announced acquisitions of technology including all the remaining outstanding capital stock of BioSeq, Inc., a privately-held development stage company with 16 patent applications based on Pressure Cycling Technology, or PCT. These acquisitions resulted in charges for acquired in-process research and development for the year of $4.2M ($3.9M after taxes). The amount written- off may be subject to further adjustment, as the Securities and Exchange Commission continues to focus on the accounting for acquired in-process research and development.
Four other major items also contributed to the 1998 loss. First, the Company's Quality Control Panel sales fell short of expectations as a result of consolidations taking place in the industry. Second, competitive price pressure continued to hurt margins in the clinical laboratory business. Third, research and development expenditures were increased significantly (by $1.1M) as compared to 1997 levels, as the Company began in earnest its stated objective of increasing its financial support of both its PCT and drug discovery programs. And finally, sales at BBI Source Scientific (the Company's instrumentation subsidiary) fell short of expected levels, resulting in a net loss for this subsidiary.
"Although we are disappointed with the magnitude of our 1998 loss, we believe that our purchase of BioSeq, as well as our investments in BBI Source Scientific, PCT, and the drug discovery program offer significant potential for growth and future profitability for the Company," commented Kevin Quinlan, Senior Vice President and Chief Financial Officer. "While we are concerned about the effects of consolidation and price pressure, we continue to take steps to improve the profitability of our core business units."
"Our sales of Accurun(R) and other TQS products doubled for the fourth consecutive year, while revenue at BBI Clinical Laboratories increased by 19% over 1997," said Richard T. Schumacher, Founder and President. "At the same time, these two core business units were responsible for generating over $700,000 in operating profit in 1998, excluding charges for the BioSeq acquisitions."
Schumacher continued, "Our 1999 plan is to focus on growth and profitability in our core business units, to concentrate on the turnaround of BBI Source Scientific, and to continue our very important R&D investments in PCT and drug discovery technologies."
Boston Biomedica, Inc. is a worldwide manufacturer and provider of proprietary quality control products for use with IVD test kits for the detection, analysis and monitoring of infectious diseases, including AIDS, Hepatitis, Lyme Disease and ToRCH. These products are used by clinical and research laboratories, blood banks, and IVD manufacturers to help ensure the accuracy of infectious disease test results through the routine monitoring of test performance. The Company also manufactures diagnostic test kit components and laboratory instrumentation, provides specialty laboratory testing and contract research services, and has significant R&D investment in PCT and drug discovery.
Statements contained in this news release that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are "forward-looking" statements. It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. There can be no assurance that the SEC will not require a restatement of the Company's 1998 financial results in connection with the accounting for the acquisition of in-process research and development. As with any new technologies, there can be no assurance that the pressure cycling technology being developed by BBI BioSeq or the Company's efforts in its drug discovery program will lead to any commercially viable applications. There can also be no assurance that the Company will successfully turnaround the operations of BBI Source Scientific. Additional information concerning factors that could cause actual results to differ materially from those in the forward- looking statements is contained from time to time in the Company's SEC filings, including but not limited to the Company's reports on Form 10-Q for the period ended September 30, 1998 and Form 10-K for the period the ended December 31, 1997. Copies of this document may be obtained by contacting the Company or the SEC.
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BOSTON BIOMEDICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Twelve Months Ended
December 31, December 31,
1998 1997 1998 1997
REVENUE:
Product sales $3,657,369 $3,824,342 $13,075,085 $11,711,026
Services 3,586,822 3,477,209 13,005,991 10,588,311
Total revenue 7,244,191 7,301,551 26,081,076 22,299,337
COSTS AND EXPENSES:
Cost of product
sales 2,157,559 1,662,847 7,179,920 5,773,417
Cost of services 2,417,451 2,491,779 8,897,046 7,238,527
Research and
development 919,169 438,994 2,461,316 1,311,190
Acquired research
and development -- -- 4,230,812 --
Selling and
marketing 1,170,235 982,043 3,938,753 3,241,422
General and
administrative 1,276,413 1,028,345 4,275,627 3,342,829
Total operating
costs and
expenses 7,940,827 6,604,008 30,983,474 20,907,385
(Loss) income from
operations (696,636) 697,543 (4,902,398) 1,391,952
Interest income 1,464 36,398 27,901 288,743
Interest (expense) (59,977) (8,547) (78,621) (5,972)
Income before
income taxes (755,149) 725,394 (4,953,118) 1,674,723
Benefit from
(provision for)
income taxes 253,879 (290,157) 564,399 (669,889)
Net income $ (501,270) $435,237 $(4,388,719) $ 1,004,834
Net (loss) income
per share, basic $(0.11) $ 0.10 $(0.94) $0.23
Net (loss) income
per share, diluted $(0.11) $ 0.09 $(0.94) $0.21
Number of shares used
to calculate net income
per share
Basic 4,667,826 4,529,888 4,654,609 4,437,801
Diluted 4,667,826 4,809,494 4,654,609 4,780,070
CONSOLIDATED SUMMARY BALANCE SHEETS
December 31, December 31,
1998 1997
Cash, cash equivalents,
and investments $146,978 $2,772,360
Property, plant and equipment 6,925,423 4,980,164
Other assets 16,929,131 15,897,472
Total Assets $24,001,532 $23,649,996
Debt $4,581,019 $41,698
Other Liabilities 5,309,148 5,541,045
Total Liabilities 9,890,167 5,582,743
Stockholders' equity 14,111,365 18,067,253
Total liabilities and
stockholders' equity $24,001,532 $23,649,996
SOURCE Boston Biomedica, Inc.
Web site: http: //www.bbii.com
CONTACT: Richard T. Schumacher, President & CEO, or Kevin W. Quinlan, CFO, or William R. Prather, MD, Sr. VP Business Development of Boston Biomedica, Inc., 508-580-1900