In Fourth Quarter, Cuts Operating Loss to Almost Break-Even and Increases Revenues and Gross Profits

Company Website: http://www.ivaxdiagnostics.com
MIAMI -- (Business Wire)

IVAX Diagnostics, Inc. (NYSE Amex: IVD), a fully integrated in vitro diagnostics company, reports its financial results for the fourth quarter and full year ended December 31, 2011.

Kevin D. Clark, Chief Executive Officer, Chief Operating Officer and President of IVAX Diagnostics, said, “I am pleased to report a turnaround in the fourth quarter of 2011, as compared to the fourth quarter of 2010, with a significant reduction in operating loss to almost break-even, resulting from an increase in revenues and a significant reduction in operating expenses. After reducing costs in 2010, we continued our streamlining and again reduced operating expenses significantly in 2011. This has enabled us to achieve an operating result close to break-even for the fourth quarter of 2011. Our cash position also improved dramatically during 2011, due to new debt and equity funding and much lower cash used in operations. Looking ahead into the remainder of 2012, now that we have become much more streamlined, we have begun focusing on implementing a number of new initiatives in an effort to grow sales and product range, organically as well as inorganically, 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, which has already provided us with $5.45 million of equity funding and which has agreed to provide us with another $10.0 million pursuant to the stock purchase agreement and which has the right to provide us with an additional $14.55 million pursuant to the warrant.”

Highlights of Operating Results for the Quarter and Year Ended December 31, 2011

For the quarter ended December 31, 2011, net revenue increased to $4.2 million from $4.0 million in the quarter ended December 31, 2010. Gross profit for the quarter ended December 31, 2011 increased to $2.0 million from $1.9 million in the quarter ended December 31, 2010. Gross profit margins for the quarter ended December 31, 2011 increased to 48.7% from 46.3% in the quarter ended December 31, 2010. Operating expenses for the quarter ended December 31, 2011 significantly decreased to $2.1 million from $2.8 million in the quarter ended December 31, 2010. The loss from operations for the quarter ended December 31, 2011 significantly decreased to $0.1 million from $0.9 million in the quarter ended December 31, 2010. Net loss was $0.3 million, or $0.01 loss per share, in the quarter ended December 31, 2011 compared to net loss of $0.8 million, or $0.03 loss per share, in the quarter ended December 31, 2010.

Net revenues for the year ended December 31, 2011 were $16.8 million compared with $17.0 million in the year ended December 31, 2010. The decrease in revenue included decreases of $0.3 million from domestic operations offset by an increase of $0.1 million from European operations. European revenue included $0.3 million due to the fluctuation of the U.S. dollar relative to the Euro. As measured in Euros, European revenue for 2011 decreased 3.4% compared to European revenue generated in 2010, principally due to a decline in the volume of reagent sales. The decline in domestic revenue for 2011 compared with 2010 was also primarily the result of a decrease in reagent sales. Gross profit in 2011 was $8.6 million compared with $8.8 million in 2010. Gross profit margins were 51.3% in 2011 compared with 51.8% in 2010. Gross margin percentage declined in 2011 mainly due to higher instrument sales, which have lower margins than reagent sales. Operating expenses for the year ended December 31, 2011 were $11.8 million compared with $13.0 million in the year ended December 31, 2010. Selling expenses increased by $0.2 million in 2011 compared to 2010 mainly due to salaries for newly hired sales personnel and marketing expenses related to the launch of new products in the United States. General and administrative expenses decreased by $1.1 million in 2011 compared to 2010, principally due to a decrease in the number of executive officers and severance cost in 2010 of $0.7 million which was not incurred in 2011. These and other decreases in general and administrative expenses were offset by higher bad debt provisions in 2011. Research and development expenses decreased by $0.2 million in 2011 compared to 2010 principally due to the decrease in research and development expenses in the United States following the regulatory approval and commercial release of the Mago^® 4S. Other expense of $0.3 million in 2011 was primarily due to unrealized foreign exchange losses. The loss from operations in 2011 was $3.2 million compared with a loss from operations of $4.2 million in 2010. Net loss for 2011 was $3.3 million, or $0.11 loss per share, compared with net loss of $4.2 million, or $0.15 loss per share, in 2010.

About IVAX Diagnostics, Inc.

IVAX Diagnostics, Inc. (www.ivaxdiagnostics.com), headquartered in Miami, 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, through its three subsidiaries: Diamedix Corporation (U.S.), Delta Biologicals S.r.l. (Europe) and ImmunoVision, Inc. (U.S.).

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 IVAX Diagnostics, Inc., including, without limitation: the risks and uncertainties related to the transactions contemplated by IVAX Diagnostics’ stock purchase agreement with ERBA Diagnostics Mannheim GmbH, including 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 Diagnostics Mannheim, that ERBA Diagnostics 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 Diagnostics Mannheim deems to be appropriate, which may include, among other things, the future market price of IVAX Diagnostics’ common stock, which is subject to volatility and a number of other factors, many of which may be beyond IVAX Diagnostics’ control, and that, when deciding whether or not, and if so when, to exercise the warrants, in whole or in part, ERBA Diagnostics Mannheim’s interest may conflict with IVAX Diagnostics’ interests; IVAX Diagnostics’ ability to successfully improve its financial condition, results of operations and cash flows; IVAX Diagnostics’ ability to successfully capitalize upon past and existing, and implement new, cost containment efforts and achieve a reduction in its expenses; IVAX Diagnostics’ ability to successfully grow its business, sales and product range in the U.S. and other markets, whether organically or inorganically, during the anticipated time frame or at all; IVAX Diagnostics’ ability to successfully expand its suite of products; IVAX Diagnostics’ ability to successfully increase its global footprint, whether in the U.S. or other markets; IVAX Diagnostics’ ongoing initiatives to reduce manufacturing costs, manage operating expenses, increase sales in the U.S. and other markets and otherwise improve its operating results and performance may not be successful or result in the positive financial impact expected, whether in the time frame anticipated, or at all; IVAX 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 IVAX Diagnostics’ financial condition, operating results or cash position; economic, competitive, political, governmental and other factors affecting IVAX Diagnostics and its operations, markets and products; the success of IVAX Diagnostics’ technological, strategic and business initiatives; IVAX Diagnostics’ ability to achieve cost advantages from its own manufacture of instrument systems, reagents and test kits; voting control of IVAX Diagnostics’ common stock by ERBA Diagnostics Mannheim; conflicts of interest with ERBA Diagnostics Mannheim and with IVAX Diagnostics’ officers, employees and other directors, including, without limitation, directors that are also executive officers of ERBA Diagnostics Mannheim; and other risks and uncertainties that may cause results to differ materially from those set forth in the forward-looking statements. 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 IVAX Diagnostics’ filings with the Securities and Exchange Commission, including, without limitation, the risks and uncertainties discussed under the heading “Risk Factors” in such filings.

Contacts:

IVAX Diagnostics, Inc.
Kevin Clark, 305-324-2300
CEO, COO and President

Source: IVAX Diagnostics, Inc.