Corgenix first quarter total revenues increase 10.1% to $2.18 million

Corgenix Medical CorporationNov 14 2011

Corgenix Medical Corporation (OTC BB: CONX.OB), a worldwide developer and marketer of diagnostic test kits, today filed its fiscal quarter Form 10-Q and reported financial results. The report disclosed that the company's operating results have advanced for the quarter ended September 30, 2011.

“We continue to expect to see progressive strengthening leading to a record year, with sales approaching or exceeding $10 million and with increased EBITDA and net earnings.”

Financial Highlights for the Quarter ended September 30, 2011

• Total revenues for the quarter ended September 30, 2011, (first fiscal quarter) increased 10.1% to $2.18 million from $1.98 million in the same period of 2010.
• North American revenues increased 28.9% to $1.88 million from $1.46 million in the prior year; international sales decreased in the period 44.1% to $302,311 due to the transfer of the international distribution responsibilities to the ELITech Group in October 2010.
• The most significant increases in revenue compared to the same period in the prior year were contract manufacturing (increasing 641%), AspirinWorks^® (increasing 116%) and contract R&D and grant revenue (increasing 48%).
• The total cost of revenues for the quarter increased from 46.3% to 51.9%. The increase is largely due to the conversion of the international distribution business to a master distributor relationship, resulting in lower margins, plus the higher costs of revenues related to contract R&D and grants.
• Total operating expenses for the quarter ended September 30, 2011, decreased 20% to $1.04 million from $1.30 million in the prior year. Most of the reduction was related to the one-time costs in the prior year of closing the company's U.K. subsidiary, which decreased from $366,639 in 2010 to $17,202 in 2011. In addition, general and administrative expenses decreased 16%, selling and marketing expenses increased 38% due to the expansion of the U.S. sales force, and research and development expenses remained nearly constant.
• Interest expense decreased 45% to $60,222 in the current quarter from $108,662 in the prior year due to reduced borrowings tied to termination of two financing agreements with overall restructuring under more favorable terms.
• In the current quarter compared to prior year, operating income increased to $5,692 from an operating loss of $239,791, and the net loss improved significantly to $50,234 from $348,230.

"The double-digit revenue growth in the first quarter is a first step toward reaching our fiscal 2012 financial goals," said Douglass Simpson, Corgenix President and CEO. "We continue to expect to see progressive strengthening leading to a record year, with sales approaching or exceeding $10 million and with increased EBITDA and net earnings.

"Our U.S. customer base is continuing to broaden with new accounts, the ELITech organization is expanding our international footprint, and we are on track to overcome the planned drop-off from closing our international subsidiary. We are also adding new strategic alliances that will lead to new contract manufacturing and contract R&D programs, and we have a strong pipeline of new products in development, which will contribute to our long-term growth," Simpson continued.

Business Development Highlights for the Quarter ended September 30, 2011

• The Joint Product Development Agreement (JPDA) with the ELITech Group was amended, extending the collaboration through 2014 and increasing Corgenix' long-term manufacturing and distribution rights for products developed under the program.
• ELITech completed the third tranche investment in Corgenix of $500,000, tied to successful development of the first two products called for in the JPDA.
• The final studies for the CE Marking requirements for the first two JPDA products were completed, and the products are expected to be launched in Europe in the 2^nd quarter.
• The company made progress in the development of a wide range of additional products under the JPDA, the first of which should be completed later in fiscal 2012.
• The company expanded and strengthened its U.S. selling and marketing organization to maintain significant revenue growth.
• The company enhanced its systems capability by securing U.S. distribution rights for the AXA Diagnostics SkyLAB 752™, a new, high-throughput automated microplate processing instrument that will be marketed in conjunction with Corgenix kits, delivering higher throughput and labor-saving advantages to large U.S. customers.
• The company made substantial progress on the addition of several new contract manufacturing partners.