News: Portfolio 2007

OraSure Announces 2006 Financial Results

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"Strong performance from our infectious disease and substance abuse businesses was clearly the highlight in 2006," said Douglas A. Michels, President and Chief Executive Officer of OraSure Technologies. "We generated a strong bottom line and significant cash flow from operations, despite shortfalls in revenue from our over-the-counter cryosurgical product and the absence of new government orders for our OraQuick ADVANCE(R) test. We also made significant progress towards the submission of our OraQuick(R) HIV test to the FDA for over-the-counter approval and in the development of an OraQuick(R) rapid hepatitis C test for professional use. I believe we are well positioned to achieve our objectives for 2007 and beyond."

The Company's gross margin was 64% in 2006, up from the 60% in 2005. Gross margin was positively affected by the absence of a $1.5 million charge recorded in 2005 related to a reserve for UPlink(R) inventory.

For the full year 2006, operating expenses increased to $37.9 million from $33.8 million recorded in 2005. Operating expenses for the quarter ended December 31, 2006 were $10.7 million, compared to $8.6 million for the comparable period in 2005. These increases were primarily attributable to higher research and development costs associated with the development and clinical work for an OraQuick ADVANCE(R) HIV test for home use and an OraQuick(R) hepatitis C test for professional use, higher staffing related expenses and stock option expenses, partially offset by lower legal costs and reduced advertising reimbursement related to the Company's North American over-the-counter cryosurgical product.

Cash, cash equivalents and short-term investments totaled $91.0 million and working capital was $96.2 million at December 31, 2006, compared to $77.6 million and $90.7 million, respectively, at December 31, 2005.

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