ABMC Reports Fourth Quarter and Year End 2013 Results

KINDERHOOK, N.Y.--(BUSINESS WIRE)--

American Bio Medica Corporation ABMC today announced financial results for the fourth quarter and year ended December 31, 2013.

Net sales in the fourth quarter of 2013 were $2,133,000 compared to $2,302,000 in the fourth quarter of 2012, a decrease of 7.3%. The Company attributes the sales decline in the fourth quarter to the inability to sell its oral fluid products in the workplace market (due to the unexpected not substantially equivalent determination by FDA in November 2013). Operating loss was $271,000 in the fourth quarter of 2013, compared to an operating loss of $501,000 in the fourth quarter of 2012. The improvement in operating results was primarily due to inventory disposals in the fourth quarter of 2012 that did not reoccur in the fourth quarter of 2013 (due to the Company's efforts to closely monitor inventory levels along with manufacturing costs), offset by increases in G&A (financing costs) and R&D (FDA compliance costs). The Company reported net income of $145,000 in the fourth quarter of 2013, compared to a net loss of $564,000 in the fourth quarter of 2012. The improvement in earnings in the fourth quarter of 2013 is due to the Company's receipt of a key man insurance benefit maintained on the Company's former CEO Stan Cipkowski.

Net sales for the year ended December 31, 2013 were 8,894,000, compared to net sales of $9,343,000 in the year ended December 31, 2012; representing a decrease of 4.8%. The sales decline was attributed to the loss of workplace oral fluid sales in the fourth quarter of 2013, and continued uncertainty in the workplace and government markets. Operating loss for the year ended December 31, 2013 was $1,131,000, compared to an operating loss of $929,000 for the year ended December 31, 2012 due to increased financing costs and share based payment (non-cash) expense in 2013. Net loss for 2013 was $788,000, compared to net loss of $1,111,000 in 2012. The earnings improvement in 2013 is primarily due to the Company's receipt of the key man insurance benefit.

ABMC interim Chief Executive Officer Melissa A. Waterhouse stated, “Late 2013 was tough for ABMC; our longtime CEO passed away suddenly, we received an unexpected NSE letter from FDA and subsequently stopped selling our oral fluid product in the workplace market. The loss of these workplace sales and increased operating expenses (a material portion of which were non-cash charges, brokers fees related to debt financings and costs related to our oral fluid marketing clearance submission), resulted in a sizeable operating loss for 2013.”

Waterhouse continued, “However, in the latter part of 2013, we also commenced a number of personnel and expense cuts to improve our financial condition and cash flow. The significant savings created by these reductions are not readily apparent in our 2013 results given their timing of implementation; but they are apparent now. In 2014, we are already taking actions to bring a new urine-based drug test to the clinical and possibly consumer market, and refocusing our sales efforts on the forensic and international markets for oral fluid. We are also exploring strategic opportunities, including possible restructure of debt, which could further strengthen our financial condition. ABMC continues to run smoothly and our objective remains to move the company forward toward profitability in 2014.”

For more information on ABMC or its drug testing products, please visit www.abmc.com.

About American Bio Medica Corporation

American Bio Medica Corporation manufactures and markets accurate, cost-effective immunoassay test kits, primarily point of collection tests for drugs of abuse. The Company and its worldwide distribution network target the workplace, government, corrections, clinical and educational markets. ABMC's Rapid Drug Screen®, Rapid ONE®, RDS® InCup®, Rapid TOX® and Rapid TOX Cup® II test for the presence or absence of drugs of abuse in urine, while OralStat® and Rapid STAT™ test for the presence or absence of drugs of abuse in oral fluids. ABMC's Rapid Reader® is a compact, portable device that, when connected to any computer, interprets the results of an ABMC drug screen, and sends the results to a data management system, enabling the test administrator to easily manage their drug testing program.

This release may contain forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ, and such differences could be material. Such risks and uncertainties include, but are not limited to, risks and uncertainties related to the following: continued acceptance of our products, increased levels of competition in our industry, acceptance of new products, product development, compliance with regulatory requirements, including but not limited to our ability to obtain marketing clearance on our OralStat product, intellectual property rights, our dependence on key personnel, third party sales and suppliers, trading in our common shares may be subject to “penny stock” rules, our history of recurring net losses and our ability to continue as a going concern. There can be no assurance that the Company will be successful in addressing such risks and uncertainties and the Company assumes no duty to update any forward-looking statements based upon actual results. Investors are strongly encouraged to review the section entitled “Risk Factors” in the Company's annual report on Form 10-K for the year ended December 31, 2012, quarterly reports on Form 10-Q, and other periodic reports on file with the Securities and Exchange Commission for a discussion of risks and uncertainties that could affect operating results and the market price of the Company's common shares.

(financial tables follow)

American Bio Medica Corporation
Statements of Operation
		Three Months Ended								Year Ended
		December 31,								December 31,
			2013				2012				2013				2012
		(unaudited)				(unaudited)				(unaudited)
Net sales			2,133,000			$	2,302,000			$	8,894,000			$	9,343,000
Cost of goods sold			1,222,000				1,853,000				5,322,000				5,999,000
Gross profit			911,000				449,000				3,572,000				3,344,000
Operating expenses:
Research and development			152,000				46,000				645,000				207,000
Selling and marketing			344,000				326,000				1,722,000				1,829,000
General and administrative			686,000				578,000				2,336,000				2,237,000
Total operating expenses			1,182,000				950,000				4,703,000				4,273,000
Operating loss			(271,000	)			(501,000	)			(1,131,000	)			(929,000	)
Other income/(expense) - net			419,000				(63,000	)			345,000				(184,000	)
Net income / (loss) before tax			148,000				(564,000	)			(786,000	)			(1,113,000	)
Income tax expense			3,000				0				(2,000	)			2,000
Net income / (loss)			145,000			$	(564,000	)		$	(788,000	)		$	(1,111,000	)
Basic & diluted income / (loss) per common share		$	0.01			$	(0.03	)		$	(0.04	)		$	(0.05	)
Basic weighted average shares outstanding			22,692,452				21,833,003				22,270,636				21,833,003
Diluted weighted average shares outstanding			22,807,001				21,833,003				22,270,636				21,833,003

(Balance Sheets follow)

American Bio Medica Corporation
Balance Sheets
		December 31,				December 31,
			2013				2012
		(unaudited)
ASSETS
Current Assets
Cash and cash equivalents		$	646,000			$	89,000
Accounts receivable, net of allowance for doubtful accounts of $58,000 at December 31, 2013 and $60,000 at December 31, 2012			875,000				810,000
Inventory, net of allowance of $399,000 at December 31, 2013 and $261,000 at December 31, 2012			2,071,000				2,571,000
Current portion of deferred financing			51,000				0
Prepaid expenses and other current assets			96,000				50,000
Total current assets			3,739,000				3,520,000
Property, plant and equipment, net			1,090,000				1,192,000
Deferred finance costs			80,000				29,000
Patents, net			43,000				24,000
Other assets			14,000				14,000
Total assets		$	4,966,000			$	4,779,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable		$	597,000			$	1,016,000
Accrued expenses and other current liabilities			314,000				174,000
Wages payable			233,000				231,000
Line of credit, net			987,000				321,000
Current portion of long-term debt, net			1,226,000				1,404,000
Total current liabilities			3,357,000				3,146,000
Other liabilities			147,000				145,000
Related party note			124,000				124,000
Total liabilities			3,628,000				3,415,000
Stockholders' Equity:
Common stock			229,000				218,000
Additional paid-in capital			20,241,000				19,490,000
Accumulated deficit			(19,132,000	)			(18,344,000	)
Total stockholders' equity			1,338,000				1,364,000
Total liabilities and stockholders' equity		$	4,966,000			$	4,779,000