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Press Release

Immunotec Announces Third Quarter 2012 Financial Results

Network sales increased 23% compared to previous year
VAUDREUIL-DORION, QUEBEC--(Marketwire - Sept. 17, 2012) - Immunotec Inc. (TSX VENTURE:IMM), a Canadian based company and a leader in the wellness industry (the "Company"), today released its 2012 Third quarter results for the period ended July 31, 2012.
Third Quarter 2012 Highlights:
(All amounts are in CAD dollars.)
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-- Network sales reached $11.7M, an increase of 23.1% as compared to the
same period in the previous year.
-- Total Revenue reached $13.0M an increase of 22.7% as compared to the
same period of the previous year.
-- Expenses as a percentage of total revenues improved to 24.2% as compared
to 26.0% of total sales for the same quarter last year.
-- Adjusted EBITDA increased to $628 thousand or 4.8% of total revenues,
compared to $283 thousand or 2.7% of total revenues over the same
quarter last year. This represents a major improvement over the prior
year.
-- Net profit of $265 thousand, compares favorably to $107 thousand for the
same period a year earlier.
/T/
"This was the largest quarterly revenue ever recorded for Immunotec" said Bob Henry, Immunotec's Chairman and CEO. "We have been able to recruit nearly 30,000 new consultants over the last nine months, representing an increase of 40% over prior year. This is an affirmation of the strength of our compensation plan and the opportunity that we provide to our Consultants."
Condensed financial results for the third quarter and year-to-date period, ended July 31, 2012 are as follows:
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-- During the third quarter, Network sales reached $11.7M in 2012 as
compared to $9.5M for the same period in 2011, an increase of 23.1% or
$2.2M. Other revenues which include revenues of products sold to
licensees, freight and shipping, charge backs and educational material
purchased by our network, were $1.3M in Q3 of 2012, a small increase of
$0.2M, as compared to $1.1M for the same period in 2011.
-- After nine months, Network sales reached $32.0M in 2012 as compared to
$27.5M for the same period in 2011, an increase of 16.4% or $4.5M. Other
revenues amounted to $3.6M in 2012, a decrease of $0.6M, directly
attributable to a reduction in export sales, compared to $4.2M for the
same period last year.
-- Sales incentives are the most significant expense and consist of
commissions, performance bonuses and other discretionary incentive cash
bonuses to qualifying distributors. During the quarter, the Company paid
$5.9M in sales incentives for an average of 50.0% of total Network sales
and the same percentage as the last year. For the nine-month period
ended July 31, 2012, the Company paid $16.2M in sales incentives for an
average of 50.8% of total Network sales this represents a small decline
as compared to 51.7% for the same period in 2011.
-- Margin before expenses, as a percentage of net sales, increased in the
third quarter ending July 31, 2012 at 29.2% as compared to 29.0% for the
same quarter in 2011. For the nine-month period ended July 31, 2012, the
Company recorded an average of 28.4% of total Revenues and a small
decline compared to 28.7% for the same period in 2011.This decrease is
primarily attributed to a reduction in Export sales to licensees which
usually provide a higher contribution margin.
-- Selected expenses in the third quarter of 2012 were $3.2M as compared to
$2.8M for the same period in 2011. They now represent 24.2% of total
revenues as compared to 26.0% of total revenues a year earlier. For the
nine-month period ended July 31, 2012, operating expenses were $9.0M
representing 25.3% of total revenues compared to 28.5% of total revenues
for the same period a year earlier.
-- The adjusted EBITDA, a non GAAP financial measure, for the three-month
period ended July 31, 2012, was $628 thousand which represents an
increase of $345 thousand or 122% over adjusted EBITDA for the same
period ended July 31, 2011. For the nine-month period ended July 31,
2012, adjusted EBITDA was $1.3M which represents an improvement of $1.0M
or 425% over adjusted EBITDA for the same period in 2011.
-- Net profit for the quarter ended July 31, 2012 totalled $265 thousand,
as compared to a net profit of $107 thousand for the same period a year
earlier. For the nine-month period ended July 31, 2012, net profit was
$162 thousand as compared to a net loss of $1.2M for the same period in
2011. This net improvement, after nine months in 2012, over the previous
year reducing the net loss by $1.3M resulted primarily due from revenue
growth in Mexico which mitigated other jurisdiction decreases while
reducing certain corporate expenses.
/T/
About Immunotec Inc.
Immunotec is a world class business opportunity supported by unique scientifically proven products that improve wellness. Headquartered with manufacturing facilities near Montreal, Canada, the Company also has distribution capacities to support its commercial activities in Canada and internationally to the United States, Europe, Mexico and the Caribbean.
The Company files its consolidated financial statements, its management and discussion analysis report, its press releases and such other required documents on the SEDAR database at www.sedar.com and on the Company's website at www.immunotec.com. The common shares of the Company are listed on the TSX Venture Exchange under the ticker symbol IMM.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS: Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For information identifying known risks and uncertainties and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the heading Risks and Uncertainties in Immunotec's most recent Management's Discussion and Analysis, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.
/T/
Interim Consolidated Statements of Financial Position
(Unaudited)
(Stated in Canadian dollars)
July 31, October 31,
2012 2011
$ $
----------------------------------------------------------------------------
ASSETS
Current assets
Cash 3,159,246 2,561,969
Trade and other receivables 1,295,556 659,004
Inventories 2,812,455 3,324,740
Prepaid expenses 447,206 393,119
----------------------------------------------------------------------------
7,714,463 6,938,832
Non-current assets
Property, plant and equipment 6,021,961 5,931,411
Intangible assets 1,685,114 2,000,217
Goodwill 833,559 833,559
Deferred income tax assets 2,675,734 2,725,367
Non-refundable research and development tax
credits 337,971 337,971
----------------------------------------------------------------------------
11,554,339 11,828,525
----------------------------------------------------------------------------
19,268,802 18,767,357
----------------------------------------------------------------------------
LIABILITIES
Current liabilities
Payables 1,263,102 935,800
Accrued liabilities 2,918,224 2,464,967
Provisions 459,278 671,201
Customer deposits 345,168 288,192
Income taxes 74,416 58,576
Current portion of long- term debt 116,071 312,320
----------------------------------------------------------------------------
5,176,259 4,731,056
Long-term debt 1,990,343 2,077,787
----------------------------------------------------------------------------
7,166,602 6,808,843
----------------------------------------------------------------------------
EQUITY
Share capital 3,465,350 3,465,548
Other equity - Stock options 1,927,710 1,903,039
Contributed surplus 11,336,849 11,337,796
Accumulated other comprehensive income 264,534 306,595
Deficit (4,892,243) (5,054,464)
----------------------------------------------------------------------------
12,102,200 11,958,514
----------------------------------------------------------------------------
19,268,802 18,767,357
----------------------------------------------------------------------------
Interim Consolidated Statements of Changes in Equity
(Unaudited)
Nine-month periods ended July 31,
(Stated in Canadian dollars except for number of shares)
Other equity
- Stock Contributed
Share capital options surplus
--------------------------
Number $ $ $
----------------------------------------------------------------------------
Balance at November 1,
2010 69,994,300 3,465,548 1,894,040 11,337,796
Net loss for the
period - - - -
Foreign currency
translation
adjustments - - - -
----------------------------------------------------------------------------
Total comprehensive loss
of the period: - - - -
Share-based compensation - - (1,405) -
----------------------------------------------------------------------------
Balance at July 31, 2011 69,994,300 3,465,548 1,892,635 11,337,796
----------------------------------------------------------------------------
Balance at November 1,
2011 69,994,300 3,465,548 1,903,039 11,337,796
Net profit for the
period - - - -
Foreign currency
translation
adjustments - - - -
----------------------------------------------------------------------------
Total comprehensive
income of the period: - - - -
Repurchase of shares (4,245) (198) - (947)
Share-based compensation - - 24,671 -
----------------------------------------------------------------------------
Balance at July 31, 2012 69,990,055 3,465,350 1,927,710 11,336,849
----------------------------------------------------------------------------
Accumulated
other
comprehensive
income Deficit Total
$ $ $
------------------------------------------------------------------
Balance at November 1,
2010 - (3,650,834) 13,046,550
Net loss for the
period - (1,237,382) (1,237,382)
Foreign currency
translation
adjustments 197,412 - 197,412
------------------------------------------------------------------
Total comprehensive loss
of the period: 197,412 (1,237,382) (1,039,970)
Share-based compensation - - (1,405)
------------------------------------------------------------------
Balance at July 31, 2011 197,412 (4,888,216) 12,005,175
------------------------------------------------------------------
Balance at November 1,
2011 306,595 (5,054,464) 11,958,514
Net profit for the
period - 162,221 162,221
Foreign currency
translation
adjustments (42,061) - (42,061)
------------------------------------------------------------------
Total comprehensive
income of the period: (42,061) 162,221 120,160
Repurchase of shares - - (1,145)
Share-based compensation - - 24,671
------------------------------------------------------------------
Balance at July 31, 2012 264,534 (4,892,243) 12,102,200
------------------------------------------------------------------
Interim Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
Three-month and nine-month periods ended July 31,
(Stated in Canadian dollars except for number of shares)
For the three-month period For the nine-month period
ended July 31, ended July 31,
2012 2011 2012 2011
$ $ $ $
----------------------------------------------------------------------------
Revenues
Network sales 11,745,818 9,540,766 31,983,983 27,473,893
Other revenue 1,334,122 1,115,894 3,559,212 4,218,179
----------------------------------------------------------------------------
13,079,940 10,656,660 35,543,195 31,692,072
Variable costs
Cost of goods sold 2,279,372 1,833,175 6,070,755 5,524,949
Sales incentives -
Network 5,872,291 4,773,420 16,243,951 14,203,931
Other variable
costs 1,106,989 961,154 3,144,149 2,869,059
----------------------------------------------------------------------------
Margin before
expenses 3,821,288 3,088,911 10,084,340 9,094,133
----------------------------------------------------------------------------
Expenses
Administrative 1,652,175 1,550,710 4,651,953 4,782,410
Marketing and
selling 1,260,565 959,162 3,666,334 3,527,444
Quality and
development costs 250,497 256,144 656,630 733,009
Depreciation and
amortization 229,294 273,272 692,556 811,674
Other expenses 2,824 (161,610) 24,671 496,015
----------------------------------------------------------------------------
Operating income
(loss) 425,933 211,233 392,196 (1,256,419)
----------------------------------------------------------------------------
Net finance
expenses 73,314 47,133 153,687 316,890
----------------------------------------------------------------------------
Profit (loss) before
income taxes 352,619 164,100 238,509 (1,573,309)
Income taxes
(recovery)
Current 8,278 15,020 23,733 19,704
Deferred 79,602 41,985 52,555 (355,631)
----------------------------------------------------------------------------
Net profit (loss) 264,739 107,095 162,221 (1,237,382)
----------------------------------------------------------------------------
Other comprehensive
income (loss), net
of income tax
Foreign currency
translation
adjustments 14,792 10,005 (42,061) 197,412
----------------------------------------------------------------------------
Total comprehensive
income (loss) for
the period 279,531 117,100 120,160 (1,039,970)
----------------------------------------------------------------------------
Total basic and
diluted net profit
(loss) per share 0.00 0.00 0.00 (0.02)
----------------------------------------------------------------------------
Weighted average
number of common
shares outstanding
during the period
Basic and diluted 69,994,063 69,994,300 69,994,063 69,994,300
----------------------------------------------------------------------------
Interim Consolidated Statements of Cash Flows
(Unaudited)
Nine-month periods ended July 31,
(Stated in Canadian dollars)
2012 2011
$ $
----------------------------------------------------------------------------
Operating activities
Net profit (loss) 162,221 (1,237,382)
Adjustments for:
Depreciation of property, plant and
equipment 275,505 345,765
Amortization of intangible assets 417,052 465,909
Gain on settlement of contingent
consideration liability - (56,950)
Unrealized foreign exchange (20,520) 293,911
Accreted interest - 44,436
Interest expense measured at amortized cost 58,171 47,355
Future income taxes 52,555 (355,631)
Share- based compensation 24,671 (1,405)
Interest paid (61,295) (47,355)
Interest received 3,124 -
----------------------------------------------------------------------------
Cash received prior to working capital
variation 911,484 (501,347)
Net change in non- cash working capital 452,531 (130,394)
----------------------------------------------------------------------------
Net cash provided by (used in) operating
activities 1,364,015 (631,741)
----------------------------------------------------------------------------
Investing activities
Additions to property, plant and equipment (366,386) (104,770)
Additions to intangible assets (105,135) (154,823)
----------------------------------------------------------------------------
Net cash used in investing activities (471,521) (259,593)
----------------------------------------------------------------------------
Financing activities
Reimbursement of long- term debt (84,353) -
Reimbursement of demand loan - (133,333)
Reimbursement of other liability (200,203) (83,572)
Repurchase of shares (1,145) -
----------------------------------------------------------------------------
Net cash used in financing activities (285,701) (216,905)
----------------------------------------------------------------------------
Net increase (decrease) in cash during the
period 606,793 (1,108,239)
Cash at the beginning of the period 2,561,969 2,936,456
Effect of foreign exchange rate fluctuations
on cash (9,516) (17,747)
----------------------------------------------------------------------------
Cash at the end of the period 3,159,246 1,810,470
----------------------------------------------------------------------------
/T/
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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