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Erba Diagnostics, Inc. (ERB) SEC Filing 10-Q Quarterly report for the period ending Monday, June 30, 2014

Erba Diagnostics, Inc.

CIK: 1095858 Ticker: ERB

 

Exhibit 99.1

 


 

ERBA DIAGNOSTICS, INC. REPORTS

FIRST QUARTER 2014 FINANCIAL RESULTS

 

- - Fourth consecutive quarter with positive net income - -

- - Integration and consolidation continues to improve operational efficiency and reduce costs - -

- - Slow start to the year on revenue growth - -

 

MIAMI LAKES, FL, May 15, 2014

- ERBA Diagnostics, Inc. (NYSE MKT: ERB), a fully integrated in vitro diagnostics company, reported its financial results for the three months ended March 31, 2014.

 

Sanjiv Suri, Interim Chief Executive Officer of ERBA Diagnostics, said, “I am pleased to report a continuation in the first quarter of 2014 of the turnaround we are experiencing, with year-over-year improvement to positive net income in the first quarter of 2014 from a net loss in the first quarter of 2013. We have also now achieved positive net income in four consecutive quarters. We continued to see growth in high margin reagents sales in the first quarter of 2014.”

 

Mr. Suri continued, “Comparing the three months ended March 31, 2014 to the three months ended March 31, 2014, revenues decreased by 5%, driven mainly by slow sales in Russia due to the political conflict in the region and by our ongoing reorganization of our international sales organization. Gross profit margin improved by approximately 80 basis points and operating expenses were lower by approximately $286,000 in the three months ended March 31, 2014 compared to the three months ended March 31, 2013, resulting in positive net income of $164,246 in the three months ended March 31, 2014 compared to a net loss of $ 247,052 in the three months ended March 31, 2013.

 

“We continue to consolidate our operations, as can be seen in the improved gross margin and lower operating expenses, as well as to implement a number of new initiatives in an effort to grow sales and expand the product range. We expect the sales reorganization for the international markets to drive revenue growth in the second half of 2014. We continue to explore potential acquisitions, both in the United States and internationally. These efforts are backed by our previously reported stock purchase agreement and warrant with our principal stockholder, ERBA Diagnostics Mannheim GmbH.”

 

Financial Highlights for the Three Months ended March 31, 2014

 

Net revenues decreased by $336,995 to $6,371,112 in the three months ended March 31, 2014 from $6,708,107 in the three months ended March 31, 2013. Gross profit decreased by $100,929 to $2,946,425 in the three months ended March 31, 2014 from $3,047,174 in the three months ended March 31, 2013.

 

 
 

 

Income from operations totaled $249,246 in the three months ended March 31, 2014 as compared to operating income of $63,831 in the three months ended March 31, 2013. This increase was primarily related to the reversal of bad debt allowance at Delta Biologicals, S.r.L., our wholly-owned subsidiary located in Italy, of approximately $153,000 and to the billing to ERBA Diagnostics Mannheim GmbH of approximately $190,000 of research and development costs at Delta Biologicals, S.r.L., offset by the decrease in gross profit from decreased net revenues as described above.

 

We generated net income of $164,246 in the three months ended March 31, 2014 as compared to incurring a net loss of $247,052 in the three months ended March 31, 2013. Basic and diluted net income per common share were $0.00 in the three months ended March 31, 2014 as compared to basic and diluted net loss per common share of $0.01 in the three months ended March 31, 2013.

 

About ERBA Diagnostics, Inc.

ERBA Diagnostics, Inc. (www.erbadiagnostics.com), headquartered in Miami Lakes, Florida, is a fully integrated in vitro diagnostics company that develops, manufactures and distributes in the United States and internationally, proprietary diagnostic reagents, test kits and instrumentation, primarily for autoimmune and infectious diseases, clinical chemistry, hematology and diabetes through its six subsidiaries – Diamedix Corporation (U.S.), Delta Biologicals S.r.l. (Europe), ImmunoVision, Inc. (U.S.), Drew Scientific, Inc. (U.S.), JAS Diagnostics, Inc. (U.S.), and Erba Diagnostics Mexico S.A. (Latin America).

 

Safe Harbor Statement

Except for the historical matters contained herein, statements in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Investors are cautioned that forward-looking statements involve risks and uncertainties that may affect the business and prospects of ERBA Diagnostics, Inc., including, without limitation, the risks and uncertainties related to: ERBA Diagnostics’ ability to successfully improve its financial condition, results of operations and cash flows; ERBA Diagnostics’ ability to successfully implement its initiatives to grow sales and expand the product range, during the timeframe expected or at all; ERBA Diagnostics’ sales reorganization for the international markets may not result in revenue growth, during the timeframe expected or at all; ERBA Diagnostics may not be successful in identifying or consummating acquisitions or other strategic opportunities and any identified and consummated acquisition or other strategic opportunity may not be successfully integrated and may not result in synergies, operational efficiencies or other benefits anticipated and may not otherwise improve ERBA Diagnostics’ financial condition, operating results or cash position; ERBA Diagnostics’ ability to successfully integrate acquired businesses or products, including, without limitation, its ability to integrate Drew Scientific; ERBA Diagnostics’ integration and consolidation, including, without limitation, its ability to integrate Drew Scientific, may not result in improved operational efficiency or reduced costs; acquisitions of businesses and products, and the integration of acquired businesses and products, may disrupt ERBA Diagnostics’ business, distract its management and may not proceed as planned, including, without limitation, its acquisition of and its ability to integrate its Drew Scientific; the risks and uncertainties related to the transactions contemplated by ERBA Diagnostics’ stock purchase agreement and warrant with ERBA Diagnostics Mannheim GmbH, including, among other things, that the transactions contemplated to be consummated at the future closings under the stock purchase agreement may not be consummated on the contemplated terms, in the time frame anticipated, or at all, that the warrants may not be exercised, in whole or in part, by ERBA Mannheim, that ERBA Mannheim has the sole discretion regarding its decision of whether or not, and if so when, to exercise the warrants, in whole or in part, and such decision will be based upon considerations ERBA Mannheim deems to be appropriate, which may include, among other things, the future market price of ERBA Diagnostics’ common stock, which is subject to volatility and a number of other factors, many of which may be beyond ERBA Diagnostics’ control, and that, when deciding whether or not, and if so when, to exercise the warrants, in whole or in part, ERBA Mannheim’s interest may conflict with ERBA Diagnostics’ interests; and economic, competitive, political, governmental and other factors affecting ERBA Diagnostics and its operations, markets and products.  In addition to the risks and uncertainties set forth above, investors should consider the economic, competitive, governmental, technological and other risks and uncertainties discussed in ERBA Diagnostics’ filings with the Securities and Exchange Commission, including, without limitation, the risks and uncertainties discussed under the heading “Risk Factors” in such filings.

 

- FINANCIAL TABLES ON FOLLOWING PAGES -

 
 

 

 

 

ERBA Diagnostics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

 

   March 31, 2014   December 31, 2013 
   (Unaudited)     
ASSETS          
CURRENT ASSETS:          
Cash and cash equivalents  $2,863,069   $4,031,071 
Accounts receivable, net   6,467,059    5,546,715 
Inventories, net   7,218,058    6,494,173 
Related party receivables   2,064,788    1,834,732 
Other current assets   336,087    395,196 
Total current assets   18,949,061    18,301,887 
PROPERTY, PLANT AND EQUIPMENT:          
Land   352,957    352,957 
Buildings and improvements   3,135,967    3,136,434 
Machinery and equipment   3,915,380    3,831,213 
Furniture and fixtures   2,153,582    2,216,720 
    9,557,886    9,537,324 
Less: accumulated depreciation   (8,103,982)   (7,976,121)
Property, plant and equipment, net   1,453,904    1,561,203 
OTHER LONG-TERM ASSETS:          
Intangible assets, net   1,396,769    1,480,151 
Goodwill   3,494,619    3,494,619 
Equipment on lease, net   576,262    586,785 
Product license   212,202    226,349 
Restricted deposits   204,686    204,686 
Other assets   18,767    18,786 
Total other long-term assets   5,903,305    6,011,376 
Total assets  $26,306,270   $25,874,466 
LIABILITIES AND SHAREHOLDERS’ EQUITY          
CURRENT LIABILITIES:          
Accounts payable  $2,334,285   $1,953,906 
Revolving line of credit   1,839,661    1,904,879 
Other accrued expenses   2,726,165    2,894,430 
Total current liabilities   6,900,111    6,753,215 
OTHER LONG-TERM LIABILITIES:          
Deferred tax liabilities   593,357    576,160 
Other long-term liabilities   1,046,951    1,027,425 
Total other long-term liabilities   1,640,308    1,603,585 
Total liabilities   8,540,419    8,356,800 
COMMITMENTS AND CONTINGENCIES          
SHAREHOLDERS’ EQUITY:          
Common stock, par value $0.01, authorized 100,000,000 shares, issued and outstanding 43,783,221 in 2014 and 43,658,221 in 2013   437,832    436,582 
Additional paid-in capital   53,186,370    53,081,370 
Accumulated deficit   (35,697,097)   (35,861,343)
Accumulated other comprehensive loss   (161,254)   (138,943)
Total shareholders’ equity   17,765,851    17,517,666 
Total liabilities and shareholders’ equity  $26,306,270   $25,874,466 
           

 

 

 

 
 

  

ERBA Diagnostics, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

For the Three Months Ended March 31, 2014 and 2013

(Unaudited)

 

   2014   2013 
NET REVENUE  $6,371,112   $6,708,107 
COST OF SALES   3,424,867    3,660,933 
Gross profit   2,946,245    3,047,174 
OPERATING EXPENSES:          
Selling   1,095,678    1,303,481 
General and administrative   1,398,078    1,332,744 
Research and development   203,243    347,118 
Total operating expenses   2,696,999    2,983,343 
Income from operations   249,246    63,831 
OTHER INCOME (EXPENSE), NET:          
Interest expense   (9,560)   (23,544)
Unrealized gain (loss) on foreign currency transactions   1,974    (9,687)
Acquisition expenses   --    (211,045)
Other expense, net   (47,885)   (25,613)
Total other expense, net   (55,471)   (269,889)
Income (loss) before provision for income taxes   193,775    (206,058)
PROVISION FOR INCOME TAXES   29,529    40,994 
Net income (loss)   164,246    (247,052)
OTHER COMPREHENSIVE INCOME (LOSS):          
Foreign currency translation adjustment   (22,311)   (74,046)
Total comprehensive income (loss)  $141,935   $(321,098)
NET INCOME (LOSS) PER SHARE – Basic  $0.00   $(0.01)
NET INCOME (LOSS) PER SHARE – Diluted  $0.00   $(0.01)
WEIGHTED AVERAGE SHARES OUTSTANDING:          
Basic   43,783,221    43,658,221 
Diluted   55,237,472    43,658,221 

 

 

 

 

 


The following information was filed by Erba Diagnostics, Inc. (ERB) on Thursday, May 15, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside this 10-Q Quarterly Report

Condensed Consolidated Balance Sheets (current Period Unaudited)
Condensed Consolidated Balance Sheets (current Period Unaudited) (parentheticals)
Condensed Consolidated Statement Of Shareholders' Equity (unaudited)
Condensed Consolidated Statements Of Cash Flows (unaudited)
Condensed Consolidated Statements Of Operations And Comprehensive Income (loss) (unaudited)
Document And Entity Information
Note 1 - Organization And Operations
Note 1 - Organization And Operations (details)
Note 10 - Segment Information
Note 10 - Segment Information (details) - Segment Reporting Information
Note 10 - Segment Information (tables)
Note 11 - Commitments And Contingencies
Note 12 - Related Party Transactions
Note 12 - Related Party Transactions (details)
Note 13 - Revolving Line Of Credit
Note 13 - Revolving Line Of Credit (details)
Note 2 - Liquidity
Note 2 - Liquidity (details)
Note 3 - Stock-based Compensation
Note 3 - Stock-based Compensation (details)
Note 3 - Stock-based Compensation (details) - Stock Option Activity
Note 3 - Stock-based Compensation (tables)
Note 4 - Cash And Cash Equivalents
Note 5 - Accounts Receivable And Allowance For Doubtful Accounts
Note 5 - Accounts Receivable And Allowance For Doubtful Accounts (details) - Accounts Receivable, Net
Note 5 - Accounts Receivable And Allowance For Doubtful Accounts (tables)
Note 6 - Inventories, Net
Note 6 - Inventories, Net (details) - Components Of Inventory
Note 6 - Inventories, Net (tables)
Note 7 - Income (loss) Per Share
Note 7 - Income (loss) Per Share (details)
Note 8 - Income Taxes
Note 8 - Income Taxes (details)
Note 8 - Income Taxes (details) - Provision For Income Taxes
Note 8 - Income Taxes (tables)
Note 9 - Concentration Of Credit Risk
Note 9 - Concentration Of Credit Risk (details)
Ticker: ERB
CIK: 1095858
Form Type: 10-Q Quarterly Report
Accession Number: 0001437749-14-015026
Submitted to the SEC: Tue Aug 12 2014 7:03:37 AM EST
Accepted by the SEC: Tue Aug 12 2014
Period: Monday, June 30, 2014
Industry: Pharmaceutical Preparations

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